Name: Sysorex, Inc. Q2 2021 Earnings Call
Start: 2025-11-20 10:09:13.074644+00

Executive Summary

Q2 2021 revenue surged to $6.246M driven by the TTM Digital Ethereum mining business, versus $0.274M in Q2 2020 and $1.407M in Q1 2021; Adjusted EBITDA was $2.849M, but GAAP net loss reflected $22.0M merger charges and $2.0M debt restructuring fees .
EPS was $(0.168) as “Other income (expense)” totaled $(24.057)M (merger/debt items), while loss from operations was $(1.805)M; both segments (TTM Digital, SGS) posted operating losses amid elevated depreciation and acquisition-related costs .
Mining KPIs: ~1,600 ETH mined in Q2 (vs ~1,300 in Q2 2020); average realized ETH price rose ~~12.7x YoY (~~$2,596 vs ~$204), underpinning mining income of $4.234M for the quarter .
Management expects quarter-over-quarter revenue and profitability growth for the balance of 2021 and is holding newly mined Ether post ~$8M debenture financing; catalysts include EIP-1559/London hard fork, GPU expansion, and a prospective up-list to a national exchange .

What Went Well and What Went Wrong

Ethereum mining scaled profitably: “Monthly revenue from mining activities is currently ranging from $1,000,000 to $1,500,000… it costs us less than $250 to mine an Ether… in the second quarter alone, we mined over 1,600 Ether.”
Protocol tailwind: Management highlighted the London hard fork (EIP‑1559) reducing ETH supply and boosting price, driving “some of most profitable mining days in the last several months” .
Balance sheet actions: Stopped selling ETH on July 13 following the ~$8M debenture; holding newly mined ETH and completed subsequent repayments (First Choice and CoreWeave lease-to-buy obligations settled in July) .

Large non-operating charges: Merger charges of $22.0M and debt restructuring fees of $2.0M drove total other expense to $(24.057)M, overwhelming operating performance .
Segment operating losses: TTM Digital and SGS posted operating losses of $(0.948)M and $(0.857)M, respectively, with elevated depreciation ($1.345M in Q2) and acquisition-related costs .
Liquidity/going concern: Cash ~$0.1M, working capital deficit ~$9.5M at quarter-end; vendor claims and secured debentures encumbering assets signal execution and funding risk despite subsequent debenture raises .

Metric	Q2 2020	Q1 2021	Q2 2021
Total Revenues ($USD Millions)	$0.274	$1.407	$6.246
Primary EPS (Net Loss per Share, $USD)	$(0.001)	$(3.06)	$(0.168)
Loss from Operations ($USD Millions)	$(0.054)	$(0.829)	$(1.805)
Adjusted EBITDA ($USD Millions)	$0.160	$(0.752)	$2.849

Segment breakdown (Q2 2021):

Segment	Revenue ($USD Millions)	Mining Cost ($USD Millions)	Product Cost ($USD Millions)	Services Cost ($USD Millions)	Other Operating Expenses ($USD Millions)	Operating Income (Loss) ($USD Millions)
TTM Digital	$4.234	$0.344	N/A	N/A	$4.837	$(0.948)
Sysorex Government Services (SGS)	$2.012	N/A	$1.391	$0.242	$1.237	$(0.857)

KPIs (Mining):

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue and Profitability (directional)	H2 2021 (QoQ trajectory)	None provided	Management expects QoQ revenue and profitability growth during the balance of 2021	Raised (directional)
Capital Strategy	2021	None provided	Holding newly mined Ether post ~$8M debenture; pursuing additional funding and potential up-list to a national exchange	New initiatives

Topic	Previous Mentions (Q4 2020, FY 2020)	Previous Mentions (Q1 2021)	Current Period (Q2 2021)	Trend
Business mix pivot	Legacy VAR focus; narrow margins; vendor credit constraints; government seasonality	VAR operations; liquidity constraints; merger contemplated/closed in April	Reverse merger with TTM Digital; Ethereum mining as primary revenue driver	Shift to mining-led model
Ethereum protocol dynamics	No ETH mining; macro/government budget impacts	No ETH mining	London hard fork (EIP‑1559) reduces ETH supply; price appreciation; profitability boost	Positive tailwind
Supply chain / GPUs	General vendor/supplier constraints in VAR	Credit limitations impacting vendor terms	~10,000 GPUs; scalability; low per-ETH cost	Capacity expansion
Regulatory/legal (crypto)	Not applicable	Not applicable	Notes BitLicense positioning and Ethereum PoS transition risks (MD&A risk)	Elevated risk awareness
Government services seasonality	SLED/Federal timing (Q2/Q3 strength)	Same seasonal pattern	SGS contributes $2.0M revenue; continued variability	Stable but secondary
Funding/uplisting	High debt; working capital deficit	PPP forgiveness; debt exchanges	~$8.88M debenture raised (July), further $3.54M (Aug); intent to up-list	Improving financing access

“Monthly revenue from mining activities is currently ranging from $1,000,000 to $1,500,000… it costs us less than $250 to mine an Ether… in the second quarter alone, we mined over 1,600 Ether.” — Wayne Wasserberg, CEO
“We stopped selling Ether to fund operations following the initial, approximately $8 million closing of a financing… all newly mined Ether is now being held in our treasury wallet.”
“We expect to grow our revenues and increase profitability on a quarter-over-quarter basis during the balance of the year.”
“This is an exciting time… as the only publicly traded, pure-play, Ethereum mining and Ethereum Blockchain technologies company.”

The session was structured as a shareholder update; the furnished transcript includes prepared remarks and closing statements with limited Q&A content captured, and no quantifiable guidance ranges beyond directional commentary .

Wall Street consensus EPS and revenue estimates via S&P Global were unavailable for SYSX (missing CIQ mapping; likely no analyst coverage). As a result, comparisons to estimates are not possible for Q2 2021 [SpgiEstimatesError].

Mining economics drove the quarter: ETH price strength (avg ~$2,596) and scaled GPUs (~10k) translated into $4.234M mining income and $2.849M Adjusted EBITDA, despite segment operating losses from depreciation and acquisition costs .
GAAP loss was heavily non-operating: $22.0M merger charges and $2.0M restructuring masked underlying operational progress; monitor normalization of non-recurring items into H2 2021 .
Strategy to hold mined ETH increases exposure to crypto price volatility but may amplify equity value if ETH appreciates; liquidity planning remains critical given working capital deficit at quarter-end .
Protocol tailwinds (EIP‑1559) and potential ETH supply reduction may support mining margins; watch Ethereum’s eventual shift to proof‑of‑stake and Sysorex’s GPU repurposing plans .
Government services (SGS) provides diversification but remains secondary (Q2 $2.012M revenue); seasonality and vendor terms still matter to cash conversion .
Near-term trading: ETH price momentum, further debenture closings, and up-list progress are likely catalysts; risk factors include regulatory scrutiny and secured debentures encumbering assets .
Medium-term thesis: Execution on full-stack Ethereum strategy (NFT marketplace/DeFi initiatives referenced), continued GPU capacity/utilization, and disciplined capex may drive sustainable EBITDA, contingent on crypto macro and funding access .