![]() ![]() ![]() This is a swift increase over the ~$700,000 in revenues from mining in the previous quarter. Total costs to mine these coins were only $612,000, and so gross profitability is over 90%, excluding the $9.0 million in capital expenditures in this segment. Bitcoin Mining OperationsĪs of the most recent quarter, CleanSpark saw $6.7 million in revenues from digital currency mining. The most recent quarter revenues divided by segment. While still at an early stage in their life cycle, net income remains negative, but favorable profitability outlooks exist that I will also discuss. As of the last quarter, a total of $8.12 million in revenues was seen, with about 83% of revenues being based on Bitcoin mining. The two major revenue segments are Energy and Digital Currency mining, with Digital Agency being the third, but far smaller differentiated segment. Then I will determine what value expectations are fair for the company. Understanding how each segment is different will be an important way to moderate expectations moving forward, and I will discuss each in detail. This prevents regulation risk due to environmental costs long term, as I expect to see some form of regulation in this matter. ![]() Regardless of the future of Bitcoin, CleanSpark is a leader in environmentally friendly mining, as over 90% of their energy is sourced from renewables, with a majority from nuclear energy. However, I do not think CLSK estimated that such a trend was bound to happen, and had these plans in action as a small case study in energy-efficient mining with high margin revenues. With the recent crypto speculation craze over the first few months of the year, the stock saw extreme value, and many thought the entire company was shifting to this asset class. At a certain point, governments must consider the ethicals of destroying an asset class worth over $1.0 trillion. Further risk is associated with regulation, as the asset class is far from legalized in any country except El Salvador, yet they may be paving the way for a stable Bitcoin ecosystem. Further, the company has a predicament, should they sell the coins as soon as awarded, or should they wait for the price to increase? If the price fails to reach a higher level, then they should have sold earlier. As such, forward growth estimates must be calculated as varying price points as the future value of Bitcoin is unknown. However, risk exists as revenues are tied to the volatility of the asset class. Since late 2020, the company has also moved into Bitcoin ( BTC-USD) mining, a necessary part of the bitcoin system. Further, the potential cost savings due to the automation and optimization software will allow for benefit during normal use periods. If consumers begin to worry about their power availability with the increased risk of blackouts or power loss, then there is a large addressable market cap. Most current applications are for large-scale industrial or commercial settings, and so are unable to grow with a large consumer base. For example, look to the recent Texas grid failure last winter or the frequent California blackouts as a huge risk for the numerous companies that are headquartered in those states.Īnother point of difference to competitors such as Siemens ( OTCPK:SIEGY), Schneider ( OTCPK:SBGSF) ( OTCPK:SBGSY), or other conglomerates is that CleanSpark is attempting to be the first mainstream residential microgrid provider. With current climate change influenced weather damage, dated grid infrastructure, and increased deployment of renewable assets, I expect there will be an exponentially increasing need for microgrids over the coming years. However, CleanSpark is further differentiated by their software platforms that provide automated and optimized control to clients, and this may be the point of differentiation to the numerous competitors in the field. Now, their platform is deployed in over seven countries and their microgrid controllers are ranked 11 in the world according to Guidehouse Insights, higher than huge names like GE ( GE ), Emerson ( EMR ), and Eaton ( ETN ). For those who may be new to the company, CleanSpark ( NASDAQ: CLSK) began as a leading producer of microgrid technology, and many of their first installations were for military use. ![]()
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