Stronghold Digital Mining, Inc. Q2 FY2022 Earnings Call

· Earnings call transcript and AI-powered summary

  • Revenue: $29.2 million for Q2 2022, a 2% sequential increase despite significant decline in Bitcoin prices. Increase primarily due to higher Bitcoin production and stable Power revenue.
  • Bitcoin Production: 637 Bitcoin mined in Q2 2022, up 45% from Q1. Total of 1,075 Bitcoin mined in H1 2022.
  • Adjusted EBITDA: -$1 million in Q2 2022 vs. $4 million in Q1 2022. Includes $10.9 million in non-cash impairments due to lower Bitcoin prices.
  • Power Market Strategy: High current and forward power prices ($100+/MWh average). Selling power to the grid deemed more profitable than mining Bitcoin. Proprietary software enables dynamic power sales over mining within minutes.
  • Debt Restructuring:
    • Eliminated $70 million in debt with NYDIG in exchange for ~26,000 miners.
    • WhiteHawk financing restructured into a 36-month first lien note with $20M line of credit; included 2M warrants.
    • Converted $11 million of convertible notes’ principal to equity with reduced cash payments by $25 million.
    • Total cash debt service reduction: $113 million through 2023.
    • Estimated cash flow improvement: $40 million through 2023.

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Operator: Good afternoon and welcome to Stronghold Digital Mining's Conference Call for the Second Quarter Ended June 30 2022. My name is Mandeep and I will be your operator this afternoon. Before this call, Stronghold issued its results for the second quarter 2022 in a press release, which is available in the Investors section of the company's website at www.strongholddigitalmining.com. You can find a link to the Investors section at the top of the home page. Joining us on today's call are Stronghold's Co-Chairman and CEO, Greg Beard; and CFO, Matt Smith. Following their remarks, we will open the call for questions. Before we begin, Jeff Grampp from Gateway Group, will make a brief introductory statement. Mr. Grampp, please proceed. Jeff Grampp: Thank you, Mandeep. Good afternoon, everyone, and welcome. Today's slide presentation, along with our earnings release and financial disclosures were posted to our website earlier today and can be accessed on our website at strongholddigitalmining.com. Some statements we’re making today, may be considered forward-looking statements under securities law and involve a number of risks and uncertainties. As a result, we caution you, that there are a number of factors, many of which are beyond our control, which could cause actual results and events to differ materially, from those described in the forward-looking statements. For more detailed risks, uncertainties, and assumptions relating to our forward-looking statements, please see the

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