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| Statement |
|---|
| We generated an adjusted EBITDA of 3.1 million, which is a strong improvement from the second quarter |
| It was a strong quarter for us and I'm excited to dive into the numbers |
| Again, it was a great quarter for Argo with improvements in mining margin adjusted EBITDA and hash rates |
| Up time is outstanding thanks to Quebec's reliable power |
| We're seeing really good results, especially when we overclock them to about 130 tera hash per unit |
| Our performance is just better than expected |
| Argo is well positioned to capitalize on these trends as we move forward into 2024 |
| I'm also really optimistic about the trends that we've been seeing in the market with the increases in both Bitcoin and hash price |
| So all in all, and in summary, it was a great quarter for Argo, we increased our mining margin, our adjusted EBITDA and our total hatch rate capacity all the while continuing to cut costs and reduce debt |
| We're seeing really good performance from these machines |
| Argo has a strong fleet efficiency of right around 30 joules per tablet per tera hash, and we've had attractive power and hosting costs at an average of 0.045 per kilowatt hour so far this year |
| This combination of fleet efficiency, low power costs and hosting costs makes us well positioned for the halving |
| This cost reduction is important because it improves our overall margin and cash flow generation |
| We are pleased that we continue to improve our operating cash flow with our focus on operations and cost reduction |
| With our total hash rate capacity every $10 increase in hash price results in approximately $2.5 million of incremental revenue per quarter, which dramatically improves our profitability and cash flow |
| Our adjusted EBITDA for the quarter was 3.1 million, which is an improvement from the 1.1 million of adjusted EBITDA that we generated in Q2 |
| On the balance sheet front, we've said this time and again, that one of our main priorities is reducing our debt and interest payments in order to strengthen the balance sheet to be well positioned for that halving |
| And so I think those factors, the ones, at least, that are in our control, should enable us to remain competitive and continue to mine profitably after the halving |
| We're genuinely making good progress here |
| So all in all, Kevin, I would say that they're performing better than expected |
| But put simply the power credits we accrued helped us achieve an overall power and hosting cost of less than 0.04 per kilowatt hour |
| But it's rebounded strongly in late October and so far into November, rising to over at $90 per Peda hash per day |
| if approved by the SEC, we believe that a spot Bitcoin ETF will bring large institutional cash inflow into the space and will ultimately increase demand for Bitcoin |
| They're capable of achieving good efficiency when we down clock them |
| Our mining margin percentage was 58% for Q3, an increase over the 36% mining margin we achieved in Q2 |
| However, the power credits that we generated from the curtailment reduced our net power cost significantly and increased our mining profit to 6.1 million |
| We love the reliability of the power here |
| It's a good one |
| We've made significant progress in paying down our galaxy debt, especially |
| As we approach the halving, our key focus is on three things; fleet efficiency, cost structure and the strength of our balance sheet |
| Statement |
|---|
| As you mentioned, we generated 10.4 million of revenue for the quarter a decrease of 17% from Q2 resulting from economic curtailment |
| Over the last two years, we've seen some seasonality emerge and hash rate and network difficulty partly due to the large amount of hash rate going online in Texas |
| During the summer months, we saw instances where hash rate decreased as Texas miners curtailed operations in response to high power prices |
| As mining gets more expensive and power contracts or good power contracts, it's just more difficult to find and to mine profitably |
| Turning to our third quarter results, we mined 370 Bitcoin and generated revenue of 10.4 million which is a decrease of 17% compared to our revenue from Q2 |
| Overall, the third quarter saw hash price trend down, bottoming out at around $60 per Peda hash per day during August and September |
| As power prices increased, it became less profitable to mine, incentivizing miners to curtail their operations |
| It's come down a bit from it from its most recent peak at $90 |
| This decrease was primarily driven by economic curtailment, we experienced at Helios during August and September |
| So you can see a very strong negative correlation between the price of power and the consumption of power from Bitcoin miners |
| So it's something that we monitor closely, especially as we head into winter mines were cold weather can also impact grade conditions and power prices |
| But that seasonality does have an impact on network difficulty and hash price |
| So as we've seen, in past halving cycles, I think the difficulty adjustment will fluctuate back and forth as the network flushes out the miners that are just right on margin or below |
| As we've shown in prior quarters, we continue to scrutinize all of our non-mining operating expenses and find ways to reduce costs |
| Still, despite that is to be expected |
| miners who are not hedged, will simply shut down and stop mining |
| This was primarily driven by lower insurance costs or professional fees and lower salaries as a result of reduced headcount |
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