Soluna Holdings, Inc (SLNH)·Q3 2024 Earnings Summary

Executive Summary

• Revenue was $7.53M, up 30% YoY (Q3’24 vs Q3’23), but down 22% sequentially vs Q2’24 ($9.7M); YTD revenue reached a record $29.75M, aided by hosting and proprietary mining despite April’s Bitcoin halving headwind .
• Consolidated gross profit was negative as early-phase Soluna Cloud recorded $2.86M cost of revenue with no HPC revenue recognized in Q3, driving a consolidated gross loss of $(1.36)M; management framed Cloud spend as pre-revenue investment for AI .
• Strategic milestones: $30M finance and groundbreaking for 48 MW “Dorothy 2”; progress toward a $25M SEPA growth capital facility; total Cloud funding reached $13.75M; 512 H100 GPUs available via HPE partnership .
• Outlook updates: initial energization of Dorothy 2 now expected by end of Q1 2025 (previous communications targeted late-2024 for initial capacity); company disclosed advanced talks to replace a major hosting customer (over 50% of hosting revenue) expected to exit in Q4’24, aiming for minimal interruption .
• Near-term catalysts: S-1 effectiveness enabling SEPA draws, Cloud commercialization progress on H100 capacity, and further project term sheets across a >2.6 GW pipeline with 1.2 GW under active negotiation .

What Went Well and What Went Wrong

• What Went Well

  • Record YTD revenue ($29.7M) and positive YTD adjusted EBITDA ($3.5M) versus a ($4.5M) YTD loss last year; CEO: “achieved several important milestones this quarter including…Soluna Cloud AI…financing for…Dorothy…$25 million of growth capital” .
  • Development pipeline expanded to >2.6 GW with 1.2 GW in active term sheets; signed term sheets for 187 MW “Project Rosa” (power and land) .
  • Financing for growth: $30M for 48 MW Dorothy 2 (groundbreaking Aug 28), plus SEPA progress and Cloud funding to support AI initiatives .

• What Went Wrong

  • Cloud pre-revenue costs: $2.859M Cloud cost of revenue in Q3 with no HPC revenue recognized, producing consolidated gross loss of $(1.364)M in the quarter .
  • GAAP loss widened QoQ: Q3 operating loss $(9.02)M; G&A (incl. D&A) $7.65M; basic/diluted EPS $(1.29) vs $(5.96) in Q3’23 (benefit from higher share count YoY) .
  • Customer concentration risk: discussion underway to mutually terminate a hosting contract representing >50% of hosting revenue, with replacements “in advanced discussions” planned for Q4’24 .

Financial Results

YoY and Sequential snapshot (oldest → newest):

Segment and mix (oldest → newest):

Project/site gross profit snapshot:

KPIs and balance sheet highlights:

Additional period context (derivation): Q1’24 revenue implied at ~$12.52M from 9M’24 revenue ($29.75M) less Q2’24 ($9.70M) and Q3’24 ($7.53M) (derived).

Guidance Changes

Earnings Call Themes & Trends

No Q3’24 earnings call transcript was available; themes synthesized from the Q3 press release, 8-K, 10-Q, and monthly updates.

Management Commentary

• “Soluna continues to move at a fast pace and has achieved several important milestones this quarter including, launching our Soluna Cloud AI business and strategic partnership with Hewlett Packard Enterprises (HPE), securing financing for our Project Dorothy expansion and breaking ground and securing $25 million of growth capital.” — CEO John Belizaire .
• “Our financial results continue to build strongly with the company achieving its highest third quarter year-to-date revenue, $29.7 million.” — CEO John Belizaire .
• “This demonstrates a core competence of the company — our ability to find, evaluate, and secure access to renewable power … suited to development into data centers for … AI and Bitcoin computing with industry-leading costs.” — CEO John Belizaire (pipeline now >2.6 GW; 1.2 GW in active term sheets) .

Q&A Highlights

• No Q3’24 earnings call transcript was available in our corpus; we synthesized themes and clarifications from the 8-K, press releases, monthly updates, and 10-Q MD&A .

Estimates Context

• Wall Street consensus (S&P Global) for Q3’24 EPS and revenue was unavailable to us due to data access limits. As a result, we cannot formally score beats/misses this quarter and recommend updating once S&P Global estimates can be retrieved. Values retrieved from S&P Global were unavailable at time of request.

Key Takeaways for Investors

• Revenue up 30% YoY to $7.53M with diversified mix (hosting, proprietary mining, demand response), offset sequentially by post-halving dynamics vs Q2’24; YTD revenue a record $29.75M .
• Cloud investment phase weighing on GAAP gross profit (Cloud cost of revenue $2.86M; no HPC revenue recognized yet), but positions SLNH to monetize 512 H100 GPUs with HPE as customer traction builds .
• Dorothy 2 financing closed ($30M) and construction underway; initial energization now expected by end-Q1’25 (later than prior late-2024 initial target), a timeline shift to monitor .
• Customer concentration risk near term: a hosting client (>50% of hosting revenue) likely to exit in Q4’24; management is in advanced talks to backfill capacity to minimize disruption—execution here is critical for 1H’25 run-rate .
• Liquidity optionality: SEPA ($25M) consents secured; S-1 effectiveness is the gating item to access capital for Cloud ramp, project equity, and balance sheet strengthening .
• Legal overhang persists (NYDIG): ~$9.2M principal outstanding and ~$1.9M accrued interest/penalties; continued monitoring of litigation progression warranted .
• Pipeline breadth (>2.6 GW; 1.2 GW active term sheets) and project Rosa (187 MW) underpin medium-term capacity growth across AI and Bitcoin hosting opportunities .

Notes:

• All quantitative figures, KPIs, and timelines are sourced from the company’s Q3’24 10-Q, 8-K/press release, and monthly updates. See citations inline.