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Bit Digital, Inc 10-K Analysis & Summary – 3/14/2025

⚠️This is not investment advice.

⚠️ This is an experimental project and this report is for informational purposes only and should not be considered investment advice. Conduct your own thorough research and consult with a qualified financial advisor before making any investment decisions. ⚠️

Bit Digital, Inc.

Filing date:

03/14/2025

TLDR:

ELI5:

Bit Digital used to focus on Bitcoin mining, but now they’re also building computer infrastructure for things like AI. They made more money this year because their new business is growing, and they’re trying to be more environmentally friendly.

Accession #:

0001013762-25-000307

Published on

Analyst Summary

  • Bit Digital, Inc. is transitioning from digital asset mining to high-performance computing (HPC) infrastructure and cloud services.
  • The company achieved net income of $28.3 million in 2024, a significant improvement from a net loss of $13.9 million in 2023.
  • Revenue increased substantially from $44.9 million in 2023 to $108.1 million in 2024, driven by cloud services and colocation services.
  • Gross margin improved due to the higher-margin cloud services business.
  • The company acquired Enovum Data Centers, expanding HPC data center capacity.
  • Negative cash flow from operations in 2024 (-$13.0 million) indicates a need to monitor cash management.
  • Digital asset holdings increased from $40.5 million to $161.4 million, reflecting Bitcoin mining activities and fair value adjustments.
  • Adjusted EBITDA increased from $12.4 million in 2023 to $73.0 million in 2024.

Opportunities and Risks

  • Opportunity: Continued growth in the HPC and cloud services market.
  • Opportunity: Strategic partnerships with technology providers like NVIDIA and SuperMicro.
  • Opportunity: Focus on sustainability and disciplined data center development.
  • Risk: Volatility of digital asset market.
  • Risk: Intense competition in the HPC and cloud services market.
  • Risk: Evolving regulatory landscape related to digital assets, AI, and data privacy.

Potential Implications

Company Performance

  • Continued revenue growth and profitability driven by the HPC business.
  • Potential for increased operating expenses due to investments in workforce and infrastructure.
  • Dependence on the volatile digital asset market could impact financial performance.
  • Success hinges on effective execution of the transition to HPC and cloud services.
  • Sustainability initiatives may attract environmentally conscious investors and customers.

Stock Price

  • Positive earnings and revenue growth could lead to an increase in stock price.
  • Volatility in the digital asset market could negatively impact stock price.
  • Successful expansion of the HPC business could attract new investors.
  • Regulatory risks and competitive pressures could create uncertainty and impact stock price.

SEC Filing Report: Bit Digital, Inc. (BTBT) – Form 10-K (FY2024)

Executive Summary

This report analyzes Bit Digital, Inc.’s Form 10-K filing for the fiscal year ended December 31, 2024. The company is transitioning from a digital asset mining focus to high-performance computing (HPC) infrastructure and cloud services. Key findings include significant revenue growth driven by the cloud services business, strategic acquisitions to expand HPC data center capacity, and a shift towards sustainability. While the company achieved net income for FY2024, risks remain, including the volatile nature of digital assets, intense competition, and evolving regulatory landscape. Overall, the company shows promise, but requires careful monitoring.

Company Overview

Bit Digital, Inc. (BTBT) is a global platform for high-performance computing (HPC) infrastructure and digital asset production. The company operates two primary business segments: a digital asset business (primarily Bitcoin mining and ETH staking) and an HPC business (data centers and cloud services). The company’s headquarters are in New York City, with operations in the US, Canada, and Iceland. Recent developments include the acquisition of Enovum Data Centers, expanding HPC data center capacity, and securing key partnerships with technology providers like NVIDIA and SuperMicro.

Detailed Analysis

Management’s Discussion and Analysis (MD&A)

Management expresses optimism about the company’s transition to HPC and cloud services, highlighting revenue growth and strategic acquisitions. The MD&A emphasizes a commitment to sustainability and a disciplined approach to data center development, focusing on customer lease commitments before capital expenditure. Red flags include the company’s history of operating losses and the inherent volatility of the digital asset market. The MD&A also acknowledges the evolving regulatory landscape and potential risks associated with AI and data privacy.

Financial Statement Analysis

Key Ratios and Trends
  • Revenue Growth: Significant increase in total revenue from $44.9 million in 2023 to $108.1 million in 2024, driven by cloud services and colocation services.
  • Profitability: Shift from a net loss of $13.9 million in 2023 to a net income of $28.3 million in 2024.
  • Gross Margin: Improved gross margin due to the higher-margin cloud services business.
  • Operating Expenses: Increased operating expenses due to investments in workforce and infrastructure for the HPC business.
  • Cash Flow: Negative cash flow from operations in 2024 (-$13.0 million) compared to positive cash flow in 2023 ($1.1 million), indicating a need to monitor cash management.
  • Digital Assets: Increase in digital asset holdings from $40.5 million to $161.4 million, reflecting Bitcoin mining activities and fair value adjustments.
Visual Aids

Revenue Breakdown (2024):

<img 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Commentary

Bit Digital, Inc. demonstrated a significant turnaround in 2024, achieving net income of $28.3 million compared to a net loss of $13.9 million in 2023. This improvement was driven by substantial revenue growth, particularly from cloud services and digital asset mining, coupled with gains on digital assets. The company also completed a major acquisition of Enovum Data Centers Corp, expanding its HPC data center services. While operating expenses remain high, the company’s strategic investments and diversification efforts appear to be yielding positive results.

Financial Ratio and Metric Analysis

Profitability

Gross Profit Margin

  • Metric: 39.5%
  • Trend: Increased from -37% in 2023.
  • Industry: The industry average gross profit margin for Bitcoin mining companies is around 50-70%.

Operating Profit Margin

  • Metric: 25.5%
  • Trend: Increased from -37% in 2023.
  • Industry: The industry average operating profit margin for Bitcoin mining companies is around 20-40%.

Net Profit Margin

  • Metric: 26.2%
  • Trend: Increased from -31% in 2023.
  • Industry: The industry average net profit margin for Bitcoin mining companies is around 10-30%.

Return on Assets (ROA)

  • Metric: 5.3%
  • Trend: Increased from -7.3% in 2023.
  • Industry: The industry average ROA for Bitcoin mining companies is around 5-15%.

Return on Equity (ROE)

  • Metric: 6.1%
  • Trend: Increased from -9.1% in 2023.
  • Industry: The industry average ROE for Bitcoin mining companies is around 10-30%.

Earnings Per Share (EPS) – Basic

  • Metric: $0.20
  • Trend: Increased from -$0.16 in 2023.
  • Industry: The industry average EPS for Bitcoin mining companies varies greatly.

Earnings Per Share (EPS) – Diluted

  • Metric: $0.19
  • Trend: Increased from -$0.16 in 2023.
  • Industry: The industry average EPS for Bitcoin mining companies varies greatly.

Liquidity

Current Ratio

  • Metric: 5.4
  • Trend: Increased from 3.1 in 2023.
  • Industry: The industry average current ratio for Bitcoin mining companies is around 1-2.

Quick Ratio (Acid-Test Ratio)

  • Metric: 4.3
  • Trend: Increased from 1.5 in 2023.
  • Industry: The industry average quick ratio for Bitcoin mining companies is around 0.5-1.

Cash Ratio

  • Metric: 1.8
  • Trend: Increased from 0.6 in 2023.
  • Industry: The industry average cash ratio for Bitcoin mining companies is around 0.1-0.5.

Solvency/Leverage

Debt-to-Equity Ratio

  • Metric: 0.16
  • Trend: Decreased from 0.24 in 2023.
  • Industry: The industry average debt-to-equity ratio for Bitcoin mining companies is around 0.5-1.5.

Debt-to-Assets Ratio

  • Metric: 0.14
  • Trend: Decreased from 0.19 in 2023.
  • Industry: The industry average debt-to-assets ratio for Bitcoin mining companies is around 0.3-0.7.

Interest Coverage Ratio (Times Interest Earned)

  • Metric: N/A
  • Trend: N/A
  • Industry: The industry average interest coverage ratio for Bitcoin mining companies is around 2-5.

Activity/Efficiency

Asset Turnover

  • Metric: 0.20
  • Trend: Increased from 0.24 in 2023.
  • Industry: The industry average asset turnover for Bitcoin mining companies is around 0.2-0.5.

Valuation

Price-to-Earnings Ratio (P/E)

  • Metric: 12.2
  • Trend: N/A
  • Industry: The industry average P/E ratio for Bitcoin mining companies varies greatly.

Price-to-Book Ratio (P/B)

  • Metric: 0.95
  • Trend: N/A
  • Industry: The industry average P/B ratio for Bitcoin mining companies is around 1-3.

Price-to-Sales Ratio (P/S)

  • Metric: 1.2
  • Trend: N/A
  • Industry: The industry average P/S ratio for Bitcoin mining companies is around 2-5.

Enterprise Value to EBITDA (EV/EBITDA)

  • Metric: 3.3
  • Trend: N/A
  • Industry: The industry average EV/EBITDA for Bitcoin mining companies is around 5-10.

Growth Rates

Revenue Growth

  • Metric: 140.5%
  • Trend: N/A
  • Industry: The industry average revenue growth for Bitcoin mining companies varies greatly.

Net Income Growth

  • Metric: 304.0%
  • Trend: N/A
  • Industry: The industry average net income growth for Bitcoin mining companies varies greatly.

EPS Growth

  • Metric: 225.0%
  • Trend: N/A
  • Industry: The industry average EPS growth for Bitcoin mining companies varies greatly.

Other Relevant Metrics

Adjusted EBITDA

  • Metric: $73.0 million
  • Trend: Increased from $12.4 million in 2023.
  • Industry: N/A

Adjusted EBITDA is a non-GAAP metric that Bit Digital uses to assess its operating performance. It starts with net income (loss) and adds back depreciation and amortization, income tax expenses (benefits), and then makes adjustments for items such as share-based compensation, gains/losses on disposal of assets, and other non-recurring or non-cash items. The company believes this provides a clearer picture of its core operational profitability.

⚠️ This is an experimental project and this report is for informational purposes only and should not be considered investment advice. Conduct your own thorough research and consult with a qualified financial advisor before making any investment decisions. ⚠️