Bit Deer Q1 Financial Report Analysis and Outlook for Fiscal Year 2025

A cryptocurrency mining company recently announced its financial report for the first quarter of the fiscal year 2025. The data shows that the company's revenue in the first quarter reached $70.1 million, a year-on-year decrease of 41.3%, with a slight quarter-on-quarter increase of 1.6%. The revenue from self-operated businesses was $37.2 million, a year-on-year decrease of 10.4%. The company's consolidated gross profit was negative $3.2 million, with a gross margin of -4.6%, mainly impacted by the rise in electricity prices during Bhutan's dry season, leading to the temporary closure of local mines. However, as the second quarter enters the wet season, electricity prices have dropped back to $0.042/kwh.

It is worth noting that the company Seal's mining machine sales generated an income of 4.1 million USD, marking the official launch of its mining machine sales business. The adjusted EBITDA was negative 56.1 million USD, showing a significant decline from the positive 27.3 million USD in the same period of 2024. However, the company's net profit reached 410 million USD, mainly benefiting from the reversal of the fair value of previously accrued convertible notes (448.7 million USD) and certain cryptocurrency options (58.4 million USD).

Analysis shows that the company's prepaid accounts receivable further increased to $382 million in the first quarter of 2025, up from $310 million in the fourth quarter of 2024, which is sufficient to cover the funding required for the maximum wafer production. The Seal02 miner has begun shipping, and future self-operated and sales pace will depend on competitors' pricing strategies. If competition intensifies, priority will be given to the layout of self-operated mining sites. The Seal03 miner has also completed wafer production and is currently in the testing phase, expected to be officially put into use in self-operated mining sites and for external sales by the end of the third quarter or fourth quarter of 2025.

In response to the U.S. tariff policy, the company plans to complete the construction of the North American assembly plant in the second quarter. After that, sales in North America will utilize localized assembly. Although costs have increased by nearly 10%, the impact is relatively small compared to the current tariffs in Southeast Asia. The Southeast Asian assembly plant will meet the needs of mining sites in non-U.S. regions.

The company’s global power infrastructure construction continues to advance rapidly, with global available power capacity expected to reach nearly 1.6GW by the end of Q2 and potentially reach 1.8GW by the end of the year. As of April, the hash rate of the company’s self-operated mining sites has reached 12.5Eh/s, and it is expected to rise to 40Eh/s by October, with the possibility of exceeding 40Eh/s by the end of 2025. It is worth mentioning that the company’s latest Seal01 and Seal02 mining machines were only put into operation in the self-operated mining sites in March, yet the overall mining costs are still more than 20% lower than that of peers. With the full update of old mining machines, the cost advantage will become more pronounced, and starting from Q2, monthly output is expected to grow exponentially.

Looking ahead, the price of Bitcoin has shown an upward trend recently and is expected to break through the previous historical high of $109,000 per coin. Influenced by U.S. trade policies, the dollar is under pressure, and Bitcoin, as an alternative asset, is starting to exhibit its safe-haven properties similar to gold. Additionally, the Federal Reserve's recent adoption of an "average inflation" policy may lead to an interest rate cut as early as June, with the expectation of rate cuts for the year raised from once to three times. All these factors will support the price of Bitcoin.

For the company, after experiencing operational adjustments in the fourth quarter of last year and the first quarter of this year, the key in the coming quarters will be the speed of mining machine R&D and the expansion speed of self-operated mining sites. The operating conditions in the first quarter of 2025 may represent the lowest point in the next two years, but it also indicates that the turning point in operations is approaching, and the company is still regarded as a quality choice among North American Bitcoin mining stocks.