Sphere 3D Corp. Provides October 2024 Update

Rhea-AI Summary

Sphere 3D Corp (NASDAQ: ANY) reported mining 11.7 Bitcoin in October 2024, with a month-end deployed hash rate of 0.8 EH/s. The company achieved mining revenue of $0.8 million, selling 12.0 Bitcoin while maintaining 1.0 Bitcoin holdings. Development began on a new 12.5 MW site with a sub $0.04 power contract. The company deployed 875 of 1,000 planned Bitmain S21 machines and received 1,000 Bitmain S19 XPs. The strategic focus includes fleet upgrades, transitioning to lower-cost facilities, and potential growth through acquisitions. Production is expected to rebound in late December/early January as machines are redeployed to lower-cost facilities.

Positive

• Secured new hosting site with competitive power rate under $0.04/kWh
• Deployed 875 new generation Bitmain S21 miners
• Acquired 1,000 S19J XP miners at a discount, adding 0.14 EH/s
• Debt-free balance sheet
• Month-over-month increase in Bitcoin mining from 9.2 to 11.7
• Revenue increase from $0.6M to $0.8M month-over-month

Negative

• Year-over-year decline in Bitcoin mined (69.2 to 11.7)
• Significant decrease in deployed miners from ~12,450 to ~6,850 year-over-year
• Hash rate decreased from 1.3 EH/s to 0.8 EH/s year-over-year
• Revenue declined from $2.0M to $0.8M year-over-year
• Bitcoin holdings decreased from 11.4 to 1.0 year-over-year

Insights

Financial Analyst

The October update reveals mixed operational results with $0.8 million in mining revenue, up from $0.6 million in September. Key metrics show 11.7 Bitcoin mined, representing a 27% increase from September, though still significantly below October 2023 levels. The deployment of 875 new Bitmain S21 miners and acquisition of 1,000 S19J XP units signals a strategic fleet modernization effort.

The secured sub-$0.04/kWh power contract for the new 12.5 MW Iowa facility is particularly noteworthy, as it positions for improved margins starting 2025. However, current operations show temporary capacity reduction with hash rate at 0.8 EH/s, down from 1.3 EH/s year-over-year. The debt-free balance sheet and potential access to new capital through the cleared shelf registration provide financial flexibility for growth initiatives.

Energy Infrastructure Specialist

The new Iowa hosting facility agreement represents a significant operational advantage. Sub-$0.04/kWh power rates are highly competitive in the current market, potentially placing Sphere 3D in the lower quartile of mining cost structures. The strategic shift from higher-cost third-party hosting to owned facilities with preferential power rates should materially improve operating margins.

The planned 12.5 MW capacity expansion, combined with improved uptime expectations, indicates a well-structured approach to infrastructure scaling. However, the transition period may create temporary production volatility through Q4 2024 before stabilizing in early 2025. The focus on newer generation miners aligns well with the power-efficient facility strategy.

Stamford, Connecticut--(Newsfile Corp. - November 15, 2024) - Sphere 3D Corp. (NASDAQ: ANY) ("Sphere 3D"), a Bitcoin mining company focused on strategically growing its production, is providing a strategic and operational update for October 2024.

Key Highlights:

• 11.7 Bitcoin mined in October 2024
• Month-end deployed hash rate was 0.8 EH/s
• Development initiated on our new 12.5 MW site with multi-year sub $0.04 power contract

Metrics	Oct. 2023	Sept. 2024	Oct. 2024
Bitcoin Mined	69.2	9.2	11.7
Bitcoin Sold	74.3	10.0	12.0
Mining Revenue	$2.0 million	$0.6 million	$0.8 million
Bitcoin Holdings	11.4	1.3	1.0
Deployed Miners	~12,450	~6,300	~6,850
Month-End Deployed Hash Rate	1.3 EH/s	0.7 EH/s	0.8 EH/s

 

CEO Comments

"Mining production was slightly higher in October as we brought additional newer generation Bitmain S21 machines online. This brings our total to 875 of the 1,000 intended to be completed this quarter, with another 1,000+ anticipated in the first quarter of 2025," stated Patricia Trompeter, CEO of Sphere 3D. Approximately 1,000 Bitmain S19 XPs representing 0.14 EH/s were received in October at our partner in Iowa.

"The recent increase in Bitcoin price has us focused on maximizing our production levels while aggressively managing operating costs," continued Trompeter. "We continue to grow our hash rate by deploying the newest, most efficient Bitcoin miners and transitioning our legacy machines into hosting sites with solid return potential. As we continue to transition our miners out of higher cost 3^rd party hosting facilities, we should be able to take advantage of our lower cost facilities, bringing down our cost to mine. The transition to a facility with competitive power costs, strong up-time performance, and upgrading our mining fleet puts us in the best possible position for profitability and growth in 2025. This is a dynamic market; having a debt-free balance sheet and access to this new capital could unlock significant long-term value through continued organic growth as well as acquisitions."

Strategic Update:

New Hosting Site: As announced via a news release in early September, the company is developing a 12.5 MW hosting site in Iowa with Simple Mining LLC. The site promises improved production and reduced costs for the company. The long-term contract includes an average energy rate of under $0.04/kWh beginning January 1, 2025, and expected uptime significantly better than the previous site.

Bitcoin Production: There was a slight increase in October production as we brought our fleet of newer generation Bitmain S21s online. We removed some older generation machines which is expected to impact November and subsequently begin strengthening late December/early January.

Fleet Upgrades: In addition to energizing 875 Bitmain Antminer S21s in Iowa, we acquired 1,000 S19J XP miners at a discount and expect to energize them during the beginning of November to add 0.14 EH/s to our hash rate.

Financial Update: The company has cleared the SEC's comment phase related to not only the 10-K and 10-Qs, but also our shelf registration. If tapped by the company, proceeds would be used to accelerate the implementation of the company's long-term growth and value-generation strategy.

Strategic Partnerships Advance: Discussions with potential merger partners are advancing as we improve our operations and intelligently increase production.

Fourth-Quarter Outlook

Production is anticipated to begin to rebound in late December/early January as we redeploy machines to lower cost facilities. The recent election seems to have not only given bitcoin a boost but also added some certainity about the future of bitcoin as rules are expected to be put in place to legitimize the digital currency.

About Sphere 3D

Sphere 3D Corp. (NASDAQ: ANY) is a cryptocurrency miner growing its industrial-scale Bitcoin mining operation through the capital-efficient procurement of next-generation mining equipment and partnering with best-in-class data center operators. Sphere 3D is dedicated to increasing shareholder value while honoring its commitment to strict environmental, social, and governance standards. For more information about Sphere 3D, please visit Sphere3D.com.

Forward-Looking Statements

This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "experts," "plans," "anticipates," "could," "intends," "target," "project," "contemplates," "believes," "believes," "estimates," "predicts," "potential," or "continue" or the negative of these words or other similar terms or expressions. Expectations and beliefs regarding matters discussed herein may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from the projected. The forward-looking statements contained in this communication are also subject to other risks and uncertainties, including those more fully described in filings with the SEC, including Sphere 3D's reports filed on Form 10-K, Form 10-Q and Form 8-K and in other filings made by Sphere 3D with the SEC from time to time and available at www.sec.gov. These forward-looking statements are based on current expectations, which are subject to change.

Sphere 3D Contact

Kurt Kalbfleisch CFO, Sphere 3D
Investor.relations@sphere3d.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/230206

FAQ

How many Bitcoin did Sphere 3D (ANY) mine in October 2024?

Sphere 3D mined 11.7 Bitcoin in October 2024.

What is Sphere 3D's (ANY) new power rate at their Iowa facility?

Sphere 3D secured a multi-year contract with power rates under $0.04/kWh at their new 12.5 MW Iowa facility, effective January 1, 2025.

How many new miners did Sphere 3D (ANY) deploy in October 2024?

Sphere 3D deployed 875 Bitmain S21 miners and received 1,000 Bitmain S19 XPs representing 0.14 EH/s.

What was Sphere 3D's (ANY) mining revenue in October 2024?

Sphere 3D's mining revenue in October 2024 was $0.8 million.