Hut 8 endures Q2 challenges, but ‘bullish on a diversified strategy’
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Hut 8’s year-over-year revenue and bitcoin production plummeted during Q2 2023. Various challenges ahead of its merger with US Bitcoin Corp appear to have influenced the decline.
The Canadian-based company’s revenue was $19.1 million CAD ($14.2 million USD) during the second quarter, company executives said Monday — essentially flat from the first quarter and down from $43.8 million CAD ($32.5 million USD) in the second quarter of 2022.
The number of bitcoin Hut 8 mined last quarter was also down significantly year over year, decreasing by 58% to 399 BTC. The company had mined 475 BTC during the first three months of 2023.
Electrical problems at its Drumheller facility contributed to the decrease, with the site currently operating at only 20% of its installed hash rate.
“The electrical issues at the Drumheller site have been compounded by high energy rates, which further increased curtailment at the site,” Hut 8 CEO Jaime Leverton said during the company’s earnings call Monday.
Hut 8 is working on repairs, including by implementing firmware across all miner models designed to lower the power supply’s maximum output voltage, executives noted.
The company’s stock price was down about 7% on the day, as of 11 am ET.
Diversification key ahead of halving
Hut 8’s installed hash rate stayed flat quarter over quarter at 2.6 exahash per second (EH/s), as of June 30. The company expects its self-mining capacity to hit 7.5 EH/s after the close of its merger with US Bitcoin Corp — a deal first revealed in February.
The transaction is expected to close by Sept. 30.
But Leverton said in a statement that Hut 8 is “not here to simply chase exahash.” She added during the Monday earnings call that the company continues to diversify its business — a strategy she said is especially important before the next bitcoin halving slated for April.
The CEO noted, for example, the company’s foray into the high-performance computing (HPC) space by buying wireless connectivity company TerraGo in January 2022. US Bitcoin Corp. offers fiat-based revenue streams like hosting and managed infrastructure operations, Leverton added.
“We’re very much bullish on a diversified strategy, but I think across our space you’re going to just continue to see miners evolve their businesses in different ways,” she said.
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