BTBT

LLM Evaluations

Transcript Summary

Bit Digital (BTBT) reported Q1 2026 results centered on its strategic shift from Bitcoin mining to Ethereum staking and AI infrastructure via its WhiteFiber stake. Total revenue was $27.9 million, down 13.7% sequentially due to lower digital asset prices and mining production. The company reported a net loss of $146.7 million, largely due to non-cash mark-to-market adjustments on its crypto holdings. Despite this, Bit Digital maintains a strong liquidity position with $79.5 million in cash and 155,444 ETH valued at approximately $327 million. CEO Sam Tabar highlighted the 'agentic economy' as a major growth driver, where AI agents utilize Ethereum for automated transactions. The company is actively pursuing acquisitions to boost recurring revenue, focusing on targets in the Ethereum and AI ecosystems. With its stake in WhiteFiber valued at over $322 million and no plans to sell in 2026, management is doubling down on high-performance computing. Analysts focused on the stock's discount to Net Asset Value and the company's leverage targets, which remain capped at 20% of ETH balances. The progress of the CLARITY Act in the Senate was also cited as a potential catalyst for institutional adoption.

5-year share-count history (top 10 holders by peak, incl. exited) + price

Revenue Segments

Filing Risk Scores

BIT DIGITAL, INC.: Massive Equity Dilution and Aggressive Accounting Estimates Amidst $150M Quarterly Net Loss

Full Earnings Call Transcript — Q1 • 2026-05-15

Operator: Hello, and welcome to the Bit Digital First Quarter 2026 Earnings Conference Call. We'll begin shortly. [Operator Instructions] As a reminder, today's call is being recorded. I'll now turn the call over to your host, Daniel Kennedy, Head of Investor Relations at Bit Digital. Daniel, please go ahead.
Daniel Kelly Kennedy: Thank you, and welcome, everyone, to Bit Digital's First Quarter 2026 Earnings Call. Joining me today are Sam Tabar, our Chief Executive Officer; and Erke Huang, our Chief Financial Officer. I'd like to remind everyone that certain statements made during today's call may be forward-looking. These statements are subject to risks and uncertainties that could cause results to differ. For a discussion of these risks, please refer to our SEC filings, including our Form 10-Q filed today. Throughout the call, we may also refer to non-GAAP financial measures. Reconciliations to the most direct comparable GAAP measures can be found in our earnings materials available on our website. Unless otherwise indicated, figures discussed during these remarks are rounded for readability. Following our prepared remarks, we will open the call for questions. With that, I'll turn the call over to Sam. Sam?
Samir Tabar: Thank you, Daniel, and thank you, everyone, for joining us. Before I begin, I would like to extend a hand of welcome to our new Head of Investor Relations, Daniel Kennedy. He was formerly a Board member, adviser and director to publicly listed companies across the digital asset, crypto, fintech and AI infrastructure sectors. Welcome aboard, Daniel, and we look forward to your abilities to share the Bit Digital story and trajectory to our shareholders. Bit Digital continued advancing its strategic asset transition during the first quarter. Our business today is centered around 3 verticals: Ethereum treasury and staking, AI infrastructure through WhiteFiber, and building durable cash flow through disciplined capital allocation. We believe these businesses complement each other. Ethereum provides long-term treasury exposure and staking yields. WhiteFiber provides exposure to AI infrastructure and compute demand. Over time, we expect additional operating businesses to support recurring revenue generation across the platform. Starting with Ethereum. We continue viewing Ethereum as foundational infrastructure for digital assets and on-chain financial activity. Our approach remains disciplined. We are focused on increasing ETH per share over time while maintaining balance sheet flexibility and capital efficiency. Turning to our WhiteFiber holding. WhiteFiber remains a core strategic asset for Bit Digital and provides critical exposure to AI infrastructure where demand for compute continues exceeding available supply. We expect these constraints to persist, presenting opportunities which we believe we are uniquely positioned to capitalize on. We continue viewing WhiteFiber as a long-term holding and do not intend to monetize the position in 2026. Our company has a long history of execution in HPC, delivering projects on time and on budget to customers and partners. Importantly, Bit Digital continues to maintain a significant ownership position in WhiteFiber. The company held approximately 27 million WhiteFiber shares with a market value of approximately $322.1 million as of the end of March 2026. Turning briefly to mining. We continued reducing exposure to bitcoin mining during the quarter. Mining remains cash flow generative, but it is no longer a strategic growth priority. Capital will continue shifting towards Ethereum and infrastructure-related opportunities. Turning to the convergence and the constraint. We believe AI and Ethereum are converging. We are uniquely positioned through our exposure to AI infrastructure, the Ethereum ecosystem and strategic acquisitions. At the same time, the demand for compute and power continues to exceed available supply. We believe compute itself is becoming sufficiently scarce and valuable to emerge as a new asset class. We are strategically positioned to capitalize on both the convergence and the constraints. Finally, we will continue evaluating opportunities to expand recurring cash flow generation across our strategic asset platform. We remain disciplined in our approach and focus on long-term value creation rather than transaction volume. I'll now turn the call over to Erke.
Erke Huang: Thank you, Sam. Our first quarter 2026 results reflect the continued repositioning of the business toward infrastructure, staking and treasury operations. Total revenue for Q1 was $27.9 million compared to $32.3 million in Q4 2025. This represents a decrease of 13.7% quarter-over-quarter. Cloud services revenue was $16.8 million, down 13.1% Q-over-Q. Colocation services revenue was $4.8 million, up around 23.9% quarter-over-quarter. Staking revenue -- Ethereum staking revenue was $2.3 million, down roughly 29.4% quarter-over-quarter. The decline reflected lower average Ethereum prices and lower natively staked balances. Digital asset mining revenue was $3.7 million, down just under 33% quarter-over-quarter, reflecting lower bitcoin production and lower average bitcoin prices during the quarter. As of March 31, the company held approximately 155,444.41 Ethereum. As of April 30, approximately 60,677 Ethereum remained natively staked. Based on closing Ethereum price of around $2,104 per Ethereum. On March 31, the market value of the company's Ethereum holding was $327 million. The company's average Ethereum acquisition price for all holdings was approximately $3,045 as of 31, 2026. Rev mix -- revenue mix continued shifting away from mining and towards Ethereum-staking cloud business and colocation operations. We believe the transition continued creating a more durable and scalable operation model centered around infrastructure, staking and treasury management activities with lower dependency on legacy mining operations. Net loss was $146.7 million in Q1, 2026, compared to $185.3 million in Q4, 2025. Results continue to be impacted by non-cash mark-to-market adjustments on digital assets. Turning to the balance sheet. Cash and cash equivalents were $79.5 million as of March 31, compared to $118.4 million as of December 31, '25. Digital assets totaled $295 million at quarter end compared to $415.7 million as of December 31 last year, the decline primarily reflected the lower Ethereum price in quarter end rather than reductions in holdings. Ethereum price is roughly $2,300 as of writing and has traded in a range between roughly $1,800 and $2,400 since early February. Convertible notes increased to $334 million, with the increase driven by the insurance of the notes by WhiteFiber, which are consolidated within our financial statements. As of April 30, approximately 60,677 Ethereum remains natively staked. Total Ethereum holdings were approximately 155,461 Ethereum with a blended acquisition cost basis of around $3,028 per Ethereum. Overall, our financial profile continues evolving towards infrastructure, staking and treasury management with reduced contribution from legacy bitcoin mining operations. I will now turn the call back to Sam.
Samir Tabar: Thank you, Erke. Bit Digital has become accustomed to being early and making bold calls. When you make calls early, criticism usually comes before consensus. We believe Ethereum will become the core settlement infrastructure for the future digital financial system. We believe we are simply early again. Stablecoins, tokenized assets and on-chain settlement activity are already scaling rapidly on Ethereum compatible infrastructure. Ethereum hosts the majority of stablecoin supply by market value and remains the dominant settlement layer for institutional stablecoin activity. BlackRock launched its tokenized money market fund on ETH. We believe the broader financial system is increasingly moving toward regulatory and institutional integration with digital asset infrastructure. We share the belief that everything of value will become eventually tokenized. Ethereum is also home to innovation in areas like zero-knowledge payments, we do not believe this is temporary. It is only the beginning. Also, automated agentic workflows will increasingly transact without human intervention. The first iteration is likely to involve highly specialized agents interacting with each other to complete complex tasks automatically within predefined constraints. This will require a medium to exchange value. Ethereum offers programmable pragmatism through smart contracts. We also continue expanding our relationships across the Ethereum ecosystem. During the quarter, Bit Digital was approved by the Ethereum Foundation to purchase ETH directly from the foundation. We view that as an important validation of our long-term commitment to the ecosystem. More on that in the future. We also continue actively executing on our Ethereum treasury strategy and expect to provide a material update in the very near term. At the same time, we remain active evaluating strategic acquisition opportunities aligned with our infrastructure and treasury strategy. We are currently engaged in ongoing diligence around a potential acquisition target that will contribute revenues to Bit Digital. Our focus remains disciplined and long term. We intend to continue building a business at the crossholds of the Ethereum infrastructure, AI and HPC infrastructure and durable cash flow through strategic acquisitions. We believe Ethereum infrastructure and AI compute infrastructure are not separate strategies, but components of a single integrated platform aligned with the future digital financial system. Yesterday, the CLARITY Act advanced through the Senate Banking Committee and now moves forward in the Senate approval process. Passage of the CLARITY Act would represent a meaningful step forward for Ethereum and the broader digital asset ecosystem. Clearer market structure and regulatory clarity would support increased institutional participation and continued development of Ethereum compatible financial infrastructure. The goal remains straightforward: maintain balance sheet flexibility, allocate capital efficiently, and continue to compounding long-term shareholder value. With that had, I'd like to open the floor for some questions. If there are any analysts on the call.
Operator: [Operator Instructions] We'll now take your first question coming from the line of Nick Giles with B. Riley Securities.
Nick Giles: My first question was just along the lines of BTBT is trading at a discounted mNAV. And I wanted to get your take just on where you need to see valuation before you might think about strategic acquisitions? And then as we think about targets, I mean, what would be the rough size of any target? How many of these types of acquisitions would you be comfortable making?
Samir Tabar: So the crypto industry in general, with respect to the businesses that are built on it are trading at compressed valuations right now. So it is a good time to consider buying when there is a bear market or a mixed market in the sector. You kind of want to avoid buying when it's frothy. So we think it's an interesting time to buy. And there are a lot of great businesses out there. There are also a lot of not-so-great businesses out there. And we're in a good position with our balance sheet to buy a business that would strategically be aligned with the digital and add revenue. And it has to be -- I mean, there are a number of ways we can do this. It could be a trading or a market-making firm. It could be an Ethereum-adjacent infrastructure company, but there could even be a company involved in the -- that's participating in the agentic economy because we believe that there is an intersection with Ethereum and AI. So these are the things we've been looking at. We started that process at the beginning of this year. We've spoken to a number of candidates. We continue being on the hunt, and we look forward to hopefully selecting a candidate in an acquisition or maybe more than one acquisition, as you mentioned, it could be more than one. And when we do, we expect it to be -- we tend to be early at things, but they always -- they tend to work out. So we expect to be early in identifying whatever a candidate we decide to acquire, and we'll offer our rationale, and we'll see how it unleashes in terms of valuation in the future.
Nick Giles: Sam, I really appreciate that perspective. So just if I could try and clarify those thoughts. You would be using cash on the balance sheet because with BTBT trading at the discount to NAV, it maybe would make less sense to use your currency. But like you said, if there are good businesses trading at cheap discounts, this is kind of the time to take actions. Is that a fair summary?
Samir Tabar: That is a fair summary. Erke, do you agree?
Erke Huang: Yes, absolutely.
Operator: [Operator Instructions] We'll now take your next question coming from the line of George Sutton with Craig-Hallum.
Logan W Lillehaug: Logan on for George again today. So Sam, I'm curious to get maybe your thoughts on some of the new privacy-focused blockchains that seem to be getting more activity like Canton, for example. I guess, how do you view those as competitors to Ethereum over time, kind of competing for activity?
Samir Tabar: I think it comes down to network effects. It's really difficult to get network effects in any private block chain. It kind of reminds me of the Intranet, if you recall. You're not -- I just think you need network effects in order to make something quite valuable. That's just my opinion. I understand that others may disagree. But I don't -- the one that you're referring to, I don't have enough knowledge about it for me to really opine too heavily, to be honest.
Logan W Lillehaug: Okay. Yes. No, fair enough. Just one other for me, kind of thinking towards maybe an environment where capital raising is a bit more kind of the doors are open. I think in the past, you've talked about trying to keep leverage down to 20% of Ethereum balances. I'm just curious if that's sort of still how you would approach that or if there's any flexibility to that? And would unsecured debt kind of still be your preferred route. I know other companies have been focused on preferreds, but just want to get a better picture of kind of how that might work, again, in a market environment that's kind of more conducive to it.
Samir Tabar: Yes, Erke, do you want to take that?
Erke Huang: Yes. If I may add, yes, leveraging continue to be a key consideration we were doing in fundraising, especially taking on, let's say, convertible or other debt form of financing. So we continue to use 20% as the metrics for us making a decision, whether we like to really put on more leverage on BTBT. And in terms of other forms of financing, our equity as another tool as well. But as we all see the digital is trading at a discount NAV, but with the acquisition targets serving, those were the tools we can use as well.
Operator: Your next question will come from the line of Brian Dobson with Clear Street.
Brian Dobson: Bit Digital has evolved a lot over the course of the past 3 years, some very exciting opportunities ahead of you as you discuss strategic acquisitions. As you're thinking about the future, what do you think this business looks like in 2 years?
Samir Tabar: Bit Digital, what it'll look like in 2 years?
Brian Dobson: Yes, as you're kind of evolving the business model.
Samir Tabar: Yes. I mean we don't see the intersection of AI and ETH going away anytime soon. We expect to really want -- we just really want to participate in those future trends. And during my earnings call today, I did talk about agentic AI, and I think that there's a natural home for counterparties to interact with each other, and that would be on Ethereum. So we'd like to continue digging in on that theme, and we think that theme will only grow strong over the next 2 years.
Operator: And it appears there are no additional questions at this time. I'll turn it back to you for your closing remarks.
Samir Tabar: Thank you for joining us today. We do appreciate your continued interest and support, and we look forward to speaking with you again in the next quarter. There will be many announcements. Thank you till then.
Operator: This concludes today's call. Thank you for your participation. You may now disconnect. Goodbye.