Executive Summary

Q2 revenue was $19.10M, up 4.8% y/y but down 30.6% q/q as the April halving, June curtailments/outage at Panther Creek, and lower energy/capacity sales weighed on results; GAAP net loss was $21.27M and Adjusted EBITDA was approximately $(0.3)M .
Management emphasized new power-market tailwinds: PJM’s 2025–26 capacity auction clearing at ~$270/MW-day (approx. +800% y/y) with Panther Creek clearing 69 MW, implying ~$7M incremental revenue at 100% margin for June 2025–May 2026; PA doubled the waste coal tax credit to $8/ton (est. $2–$4M annual cash flow from 2025) .
Strategic review remains active with “numerous bids” for all or parts of the company; the team is also evaluating large-scale data center potential, including an option on 1,140 acres adjacent to Panther Creek and preliminary utility load study supporting +250 MW at Panther Creek .
Estimate comparison: S&P Global consensus data could not be retrieved due to a mapping issue (no CIQ mapping for SDIG); therefore we cannot provide S&P-based beat/miss. Third-party outlets indicated a revenue miss vs consensus, but we are not anchoring on these sources per guidance .

What Went Well and What Went Wrong

What Went Well

PJM capacity price reset and positions: Panther Creek cleared 69 MW, implying ~$7M incremental 2025–26 revenue at 100% margin; the company is evaluating Scrubgrass exits to preserve demand response optionality .
Policy tailwind: PA waste coal tax credit doubled to $8/ton through 2036, estimated $2–$4M annual cash flow uplift starting 2025, reinforcing the reclamation-driven cost advantage .
Strategic alternatives and site optionality: multiple inbound bids; preliminary utility load study supports +250 MW at Panther Creek; optioned 1,140 acres next to Panther Creek—supporting pivot/expansion into diversified data center use cases .

What Went Wrong

Q2 profitability deterioration: GAAP net loss widened to $(21.27)M amid lower q/q revenue, loss contingencies accrual (~$5.2M in Q2), and a $1.7M loss on disposal tied to decommissioned MinerVa miners .
Operational disruptions in June: voluntary curtailments during record heat, a planned Panther Creek outage, and a late-month storm impacted June hash rate and revenue (mined 61 BTC in June; ~$4.0M revenue, down 24% m/m) .
Energy/capacity sales down y/y: capacity revenue fell to $0.0M vs $0.58M in Q2’23; energy revenues also declined on lower prices and greater internal consumption, though this was tactical given mining economics .

Financial Results

P&L Snapshot and EPS

Metric	Q2 2023	Q1 2024	Q2 2024
Revenue ($M)	$18.23	$27.50	$19.10
Net Income (Loss) ($M)	$(11.69)	$5.80	$(21.27)
Basic EPS ($)	$(1.35)	N/A	$(1.25)
Adjusted EBITDA ($M)	N/A	$8.70	$(0.30)

Notes: Company adopted ASU 2023-08; realized/unrealized crypto gains/losses now flow through and are no longer excluded from Adjusted EBITDA (company also revised prior-period Adjusted EBITDA treatment) .

Segment Revenue Mix

Metric ($)	Q2 2023	Q2 2024
Cryptocurrency mining	$13,782,798	$14,988,526
Cryptocurrency hosting	$3,079,701	$3,824,299
Energy	$740,793	$221,370
Capacity	$582,557	$0
Other	$47,892	$69,944
Total operating revenues	$18,233,741	$19,104,139

KPIs and Operational Context

KPI	Q4 2023	Q1 2024	Q2 2024
Bitcoin mined (units)	599	546	~299
Adjusted EBITDA ($M)	$2.30	$8.70	$(0.30)
June 2024 monthly details	—	—	61 BTC mined; ~$4.0M revenue; curtailments/outage/storm disruptions

Balance sheet/liquidity reference points: cash $4.88M; total debt outstanding $54.82M (WhiteHawk SOFR+10% facility and other loans); minimum liquidity covenant modified to $2.5M until 6/30/2025; company in covenant compliance as of 6/30/24 .

Guidance Changes

Metric	Period	Previous Guidance	Current Update	Change
PJM Capacity payments (Panther Creek ~69 MW)	PJM 2025/26 (Jun 2025–May 2026)	N/A	~+$7M incremental revenue at ~100% margin based on $269.92/MW-day clearing	New tailwind
Waste coal tax credit	From 2025 onward	$4/ton	$8/ton; +$2–$4M annual cash flow to SDIG	Raised
Demand response/sync reserve	2024–2025	Evaluating	Registering Scrubgrass data center; demand response mutually exclusive with capacity; evaluating Scrubgrass capacity exit	Program pathway clarified

No explicit revenue/EPS/EBITDA numeric guidance was provided for Q3/Q4; management focused on structural earnings drivers (capacity prices, tax credits) and optionality (demand response, data centers) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’23 and Q1’24)	Current Period (Q2’24)	Trend
Strategic alternatives	Initiated, engaging advisors; belief that hard assets undervalued	“Numerous bids” received; process ongoing	Progressing
AI/data center expansion	Highlighted 40k+ energized slots; high-grading fleet to >7 EH/s; evaluating third sites	Optioned 1,140 acres by Panther Creek; load study supports +250 MW; engaged Appleby Strategy Group	Expanding optionality
Power market flexibility	Toggle between self-generation/import/export; Champion retail supply agreement; Panther Creek base-load, Scrubgrass seasonal	PJM BRA cleared high; capacity vs demand-response trade-off; June curtailments/outage/storm impacted ops	Mixed near-term; improved medium-term tailwinds
Carbon capture monetization	Puro registration; audit underway; early units and cost-down path	Ongoing development; framework and potential scale reiterated in 10-Q MD&A (capture potential via ash)	Continuing R&D; monetization targeted 2025
Policy/regulatory	PA Tier II RECs reduce net power cost ; flexible PJM positioning	Waste coal tax credit doubled; PJM capacity reform/prices improve revenue visibility	Policy tailwinds strengthening

Management Commentary

“In July, PJM's capacity market base residual auction cleared at $270 per megawatt day, up more than 800% from last year…at Panther Creek alone, we estimate that capacity payments will drive approximately $7 million of incremental revenue between June 2025 and May 2026 at a 100% margin.” — CEO Greg Beard .
“The waste coal tax credit was doubled from $4 per ton to $8 per ton through 2036…we estimate…an additional cash flow of $2 million to $4 million per year…starting in 2025.” — CEO Greg Beard .
“We…optioned an additional 1,140 acres immediately adjacent to our Panther Creek property…our first preliminary load study at Panther Creek…is supportive of bringing in an additional 250 megawatts.” — CEO Greg Beard .

Q&A Highlights

Capacity vs demand-response trade-off: management is evaluating exiting Scrubgrass capacity to enable demand response/sync reserves, while retaining Panther Creek capacity payments benefit .
Strategic review: reiterated “numerous bids” across full or partial company/assets; no timeline committed .
No numeric forward guidance; focus was on structural drivers (PJM capacity uplift, tax credits) and expansion optionality (land, fiber, water, additional MW) .

Estimates Context

S&P Global consensus: unavailable. We attempted to retrieve S&P Global/Capital IQ consensus for Q2 2024 (revenue, EPS, EBITDA, estimate counts) but the CIQ mapping for SDIG was missing; therefore S&P-based estimate comparisons are not provided.
Company-reported results remain the anchor for this recap: Revenue $19.10M; GAAP Net Loss $(21.27)M; Adjusted EBITDA approximately $(0.3)M .

Key Takeaways for Investors

The quarter reflected halving headwinds and June-specific disruptions, driving a sharp q/q revenue decline and negative Adjusted EBITDA; however, y/y crypto revenues rose on higher hash rate despite reduced energy/capacity contributions .
Medium-term earnings visibility improved: PJM capacity pricing could add ~$7M of high-margin revenue in 2025–26, while the doubled waste coal credit should bolster annual cash flows starting in 2025 .
Strategic alternatives and data center optionality (1,140 acres option, +250 MW load study) create multiple potential catalysts, including asset sales/merger and pivot/expansion into high-demand compute .
Balance sheet watch items: $54.82M total debt; cash $4.88M; covenant relief achieved (min liquidity to $2.5M through 6/30/25) but leverage and refinancing timelines (maturity Oct 2025) remain key risk factors .
Execution priorities: mitigate operational volatility (curtailments/outages), advance PJM program registrations, and continue cost discipline (noting $5.2M Q2 loss contingencies accrual and $1.7M MinerVa disposal loss) to restore positive EBITDA in post-halving environment .
Near-term trading implications: results likely skewed by June events; narrative may shift toward power-market monetization and strategic-process outcomes as primary stock catalysts, with BTC price and network difficulty remaining dominant macro drivers .

Additional Documents Reviewed (Q2 2024 Context)

Q2 2024 10-Q (financial statements, MD&A, liquidity/covenants) .
Q2 2024 earnings press release (operational/financial highlights; Adjusted EBITDA disclosure; policy updates) .
Q2 2024 earnings call transcript (opening remarks with key policy/market updates; strategic review; expansion plans) .
June 2024 Bitcoin & operational update (monthly BTC mined, revenue, curtailments/outage/storm context) .

Prior quarters for trend analysis:

Q1 2024 call (Revenue $27.5M; 546 BTC; Adj. EBITDA $8.7M; strategic review launched; power strategy; carbon capture audit submission) .
Q4 2023 call (Revenue $21.7M; 599 BTC; Adj. EBITDA $2.3M; power-market flexibility; carbon-capture progress) .

Stronghold Digital Mining, Inc. (SDIG)·Q2 2024 Earnings Summary