CleanSpark stock slides 9% as quarterly earnings miss estimates on bitcoin holdings loss

CleanSpark reported a net loss of $378.3 million for the quarter ending on March 31, a steep increase from the $138.8 million loss reported the same period last year.

What to know:

• CleanSpark (CLSK) stock fell over 9.4% in pre-market trading on Tuesday after the U.S. bitcoin (BTC) mining company reported a widening net loss of $378.3 million for its second fiscal quarter.
• Quarterly revenue dropped 25 percent year-over-year to $136.4 million even as the company doubled its megawatts under contract and began shifting its infrastructure toward AI and high-performance computing uses.
• Despite industry-wide pressure from bitcoin mining costs that exceed the current bitcoin price, CleanSpark highlighted a stronger balance sheet, with bitcoin holdings up 14 percent to $925.2 million, total assets of $2.9 billion and long-term debt of $1.8 billion.

CleanSpark (CLSK) stock fell over 9.4% in pre-market trading on Tuesday after the U.S. bitcoin BTC$80,621.04 mining company reported a widening net loss of $378.3 million for its second fiscal quarter, hit by a significant non-cash adjustment to its digital asset holdings.

The company reported a net loss of $378.3 million for the quarter ending on March 31, a steep increase from the $138.8 million loss reported the same period last year. The loss of $1.52 per share was more than triple the analyst estimate on EPS of a 41 cents' loss.

The firm’s bottom-hit was mainly driven by a $224.1 million non-cash bitcoin fair value loss, reflecting market volatility.

Quarterly revenue reached $136.4 million, down 25% from $181.7 million year-over-year, the report revealed, missing estimates of $154.3 million.

Despite the dip, CleanSpark expanded its infrastructure, doubling its megawatts (MW) under contract. CEO Matt Schutz said the company is pivoting to commercializing “AI/HPC-applicable assets,” joining a sector-wide shift toward leasing their computing power as AI data centers.

CFO Gary Vecchiarelly cited the firm’s balance sheet as a “competitive advantage, reporting a bitcoin holdings increase of 14% to $925.2 million in respects to last year. Total cash is $260.3 million, while total assets now sit at $2.9 billion with a long-term debt of $1.8 billion.

The estimated average cost of mining one bitcoin was $88,000 in mid-March, according to a Checkonchain difficulty regression model report. The current price of bitcoin hovers just over $80,000, meaning bitcoin mining companies across the board are operating at a loss

These economics have forced bitcoin miners to pivot toward artificial intelligence and high-performance computing infrastructure. The bitcoin mining industry had taken on roughly $70 billion in such contracts by late March.

Read More: Circle raises $222 million for Arc, beats Q1 earnings estimates but misses on revenue

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