Soluna Holdings, Inc. Reports Second Quarter Results
August 15 2022 - 6:03PM
via NewMediaWire – Soluna Holdings, Inc. (“SHI” or the “Company”),
(NASDAQ: SLNH), the parent company of Soluna Computing, Inc.
(“SCI”), a developer of green data centers for cryptocurrency
mining and other intensive computing, today announced the release
of its second quarter results.
Michael Toporek, CEO of Soluna Holdings, Inc., said, “Despite
the decline in the BTC price, our second quarter results represent
significant year-over-year growth as the team continues to execute
on our long-term plan. Soluna’s business was constructed with a
focus on ultra-low energy cost assets, and that focus has enabled
growth even in challenging times. We remain committed to investing
through the current market cycle.”
Management’s presentation with the discussion of results
including July flash financials will be released after the close on
Wednesday, August 17th.
Key Summary Highlights:
- BTC equivalent mined in the
second quarter increased 7.5x year-over-year and 18.3%
sequentially.
- Hashrate increased 38.8x
year-over-year and 25.0% sequentially.
- Revenue for the six months ending
June 30th, 2022 increased 6.8x over the prior year to $18.0
million.
- Revenue in the second quarter
decreased only 6.3% from the prior quarter to $8.7 million despite
a 21.3% decline in average BTC prices ($41k in Q1 down to $33k in
Q2).
- Cash contribution margins
excluding one-time events increased 4.0x year-over-year and only
decreased 3.9% in the second quarter to $5.0 million despite BTC
declines. - Focus on monetizing low-cost, curtailed energy
demonstrates resilience.
- Adjusted Site-level EBITDA for
the three months ending June 30th, 2022 increased 2.9x to $2.9
million from $1.0 million in 2021.
- Adjusted Site-level EBITDA in the
second quarter decreased 13.4% from the first quarter as a result
of declining BTC prices and an increase in operating costs as the
business scales to support its growing pipeline.
Revenue & Contribution Margin Summary:
*all numbers below exclude legacy hosting |
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($ in 000s, Unaudited) |
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Actual |
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|
Q1 2021 |
Q2 2021 |
Q3 2021 |
Q4 2021 |
FY 21 |
Q1 2022 |
Q2 2022 |
Revenue |
$995 |
$1,657 |
$2,368 |
$7,990 |
$13,010 |
$9,264 |
$8,676 |
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Cash Contribution Margin |
$744 |
$1,261 |
$1,703 |
$5,179 |
$8,888 |
$5,206 |
$5,005 |
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Annualized Revenue |
$3,980 |
$6,628 |
$9,472 |
$31,960 |
$13,010 |
$37,056 |
$34,704 |
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Annualized Contribution Margin |
$2,976 |
$5,044 |
$6,812 |
$20,716 |
$8,888 |
$20,824 |
$20,019 |
Business Outlook:
The Soluna team continues to execute on its long-term vision to
use batchable computing as a catalyst for renewable energy. In the
second quarter, Soluna completed the ramp of project Sophie and
continued development of the Dorothy project which we expect to
begin energizing in early Q4. While the price of Bitcoin declined
significantly over the quarter, we saw a marked increase in
interest and commitment to computing as a solution to curtailed
energy from renewable independent power producers (“IPPs”). Over
the course of the second quarter, our long-term pipeline of
opportunities grew to nearly 2GW, and we see multiple opportunities
for our next 50-150 MWs of data center projects. As a result of the
increasing adoption of our solution to curtailed energy, we believe
now is the time to continue to invest to drive long-term investor
returns. While markets may be volatile, we believe investing
through the cycle is the best way to drive long-term investor
results.
During the quarter, the volatility of bitcoin presented a
significant challenge to our industry resulting in a 6.3% decline
in dollar denominated revenue for our business. We built Soluna
from inception with a strategic focus on energy costs, so while the
decline in BTC price has a significant impact on our business we
believe we are better positioned than many of our peers.
Our focus on sites with the ability to operate between $25-$27
per MWh means that when other miners are forced to unplug we are
able to continue mining. As a result, despite the decline in BTC
prices, we increased BTC equivalent mined by 18% in the second
quarter, and we remain committed to investing through the
cycle.
Discussion of Results:
Bitcoin Equivalent Mined
Bitcoin |
|
Q1 2021 |
Q2 2021 |
Q3 2021 |
Q4 2021 |
Q1 2022 |
Q2 2022 |
BTC
Equivalent Mined |
22 |
36 |
74 |
153 |
226 |
267 |
YoY Growth (x) |
|
-- |
-- |
-- |
-- |
10.3x |
7.5x |
QoQ Growth (%) |
|
-- |
62.3% |
108.6% |
106.1% |
47.3% |
18.3% |
- Continued growth in BTC
equivalent mined despite BTC price declines demonstrates the
resiliency of Soluna’s business model in volatile markets.
- BTC equivalent mined in the
second quarter increased 7.5x year-over-year and 18.3%
sequentially.
- Over the second quarter Soluna
worked to optimize miner configurations and replace older machines
with higher performance miners and take advantage of dislocations
in the crypto mining equipment market.
Consolidated Average Proprietary Hashrate
PH/s |
|
Q1 2021 |
Q2 2021 |
Q3 2021 |
Q4 2021 |
Q1 2022 |
Q2 2022 |
Average
Hashrate |
0 |
21 |
69 |
429 |
666 |
833 |
YoY Growth (x) |
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-- |
-- |
-- |
-- |
-- |
38.8x |
QoQ Growth (%) |
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-- |
-- |
222.5% |
518.5% |
55.5% |
25.0% |
- Hashrate continued to scale as
Soluna continued the ramp up of Sophie.
- Hashrate increased 38.8x
year-over-year and 25.0% sequentially.
- Peak hashrate well in excess of 1
EH / s.
Consolidated Revenue
($ in
000s) |
|
Q1 2021 |
Q2 2021 |
Q3 2021 |
Q4 2021 |
Q1 2022 |
Q2 2022 |
Revenue |
|
995 |
1,657 |
2,368 |
7,990 |
9,264 |
8,676 |
YoY Growth (x) |
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-- |
-- |
-- |
-- |
9.3x |
5.2x |
QoQ Growth (%) |
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-- |
66.5% |
42.9% |
237.4% |
15.9% |
-6.3% |
- Rapid growth demonstrates
Soluna’s ability to scale.
- Second quarter revenue increased
5.2x year-over-year.
- Revenue only decreased 6.3%
sequentially despite average BTC prices over the quarter decreasing
21.3%.
- Increased curtailment and outages
at Marie accounted for ~$0.6mm in the revenue lost in
Q2.
- Largely seasonal,
related to increased temperatures and resulting energy usage in
summer months
Consolidated Adj. Cash Contribution Margin Excl. One-time
Events
($ in
000s) |
|
Q1 2021 |
Q2 2021 |
Q3 2021 |
Q4 2021 |
Q1 2022 |
Q2 2022 |
Adj.
Cash Contribution Margin |
744 |
1,261 |
1,703 |
5,179 |
5,206 |
5,005 |
YoY Growth (x) |
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-- |
-- |
-- |
-- |
7.0x |
4.0x |
QoQ Growth (%) |
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-- |
69.5% |
35.0% |
204.1% |
0.5% |
-3.9% |
- Second quarter Adjusted Cash
Contribution Margin excluding one-time events increased 4.0x
year-over-year.
- Sequential decline of 3.9%
despite 21.3% decline in BTC Price.
- 55.3% Prop mining contribution
margins and 17.3% hosting margins excluding legacy hosting.*
- Sophie continues to perform
exceptionally in a challenging BTC environment and remained at its
84% uptime for lower rate cards.
* Marie excludes pass-through revenue and expenses from Legacy
Hosting customers. Electricity/Direct Costs reduced by Marie
“Prepaid Lease Cost” August 2021 onward. For details on legacy
hosting, see appendix.
Site Level Adj. EBITDA
($ in
000s) |
|
Q1 2021 |
Q2 2021 |
Q3 2021 |
Q4 2021 |
Q1 2022 |
Q2 2022 |
Project
Level Adj. EBITDA |
693 |
1,006 |
1,336 |
4,393 |
3,354 |
2,906 |
YoY Growth (x) |
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-- |
-- |
-- |
-- |
4.8x |
2.9x |
QoQ Growth (%) |
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-- |
45.2% |
32.8% |
228.8% |
-23.7% |
-13.4% |
- Second quarter Site Level
Adjusted EBITDA increased 2.9x year-over-year
- Sequential decline of 13.4%
despite 21.3% decline in BTC Price
- Increased overhead and SG&A
costs to support long-term pipeline growth which reached nearly 2GW
in the quarter
About Soluna Holdings, Inc.
Soluna Holdings, Inc. (Nasdaq: SLNH) is the leading developer of
green data centers that convert excess renewable energy into global
computing resources. Soluna builds modular, scalable data centers
for computing-intensive, batchable applications such as
cryptocurrency mining, AI and machine learning. Soluna provides a
cost-effective alternative to battery storage or transmission
lines. Soluna uses technology and intentional design to solve
complex, real-world challenges. Up to 30% of the power of renewable
energy projects can go to waste. Soluna’s data centers enable clean
electricity asset owners to ‘Sell. Every. Megawatt.
For more information about Soluna, please visit
www.solunacomputing.com or follow us on LinkedIn at
linkedin.com/solunaholdings and Twitter @SolunaHoldings.
Forward Looking Statements
The statements in this press release with respect to the
progress of Soluna’s development pipeline and the ability to
scale the Dorothy project to assist partner organizations
constitute forward-looking statements within the meaning of the
federal securities laws. Forward-looking statements reflect
management’s current expectations, as of the date of this press
release, and are subject to certain risks and uncertainties that
could cause actual results to differ materially from future results
expressed or implied by such forward-looking statements. Actual
results could differ materially from those expressed or implied by
such forward-looking statements as a result of various factors,
including, but not limited to: (1) those risk factors set forth in
the Company’s Annual Report on Form 10-K for the year ended
December 31, 2021 and other reports filed with the SEC.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date made.
Except as required by law, the Company assumes no obligation to
update or revise any forward-looking statements.
Contact Information:
Chris GandolfoFinancial Reporting ManagerSoluna
Holdingschristopher@soluna.io518 218 2565
Investor RelationsBrian M. Prenoveau, CFAMZ Group – MZ North
AmericaSLNH@mzgroup.us561 489 5315
Reconciliation from Cost of Cryptocurrency Revenue to Adjusted
Cost of Revenue (Non-GAAP) |
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($ in 000s) (Unaudited) |
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Q2 2022 |
Cryptocurrency revenue (GAAP) |
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$8,676 |
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Cost of cryptocurrency revenue
(GAAP): |
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Electricity/Direct costs* |
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3,405 |
Overhead costs |
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6,705 |
Total cost of
cryptocurrency revenue (GAAP) |
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$10,109 |
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Depreciation |
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5,538 |
Project Equipment Repairs |
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0 |
Non-recurring overhead
expenses |
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0 |
Adjusted Non-GAAP Cost of
Revenue 1** |
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$4,571 |
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less Legacy Hosting Cost of
Revenue |
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0 |
less Prepaid Lease Cost |
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244 |
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Adjusted Non-GAAP Cost of
Revenue 2** |
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$4,327 |
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*Includes Hosting costs |
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**Excluding Depreciation and
R&D Expenses |
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Reconcilation from Revenue and Cost of Revenue to Contribution
Margin & Cash Contribution Margin |
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($ in 000s) (Unaudited) |
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Q2 2022 |
Cryptocurrency revenue (GAAP) |
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$8,676 |
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Cost of cryptocurrency revenue
(GAAP) |
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10,109 |
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Depreciation |
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5,538 |
Project Equipment Repairs |
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0 |
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Contribution Margin
(Non-GAAP)* |
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$4,105 |
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plus Prepaid Lease Cost |
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244 |
plus Legacy Hosting
Contribution Margin |
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0 |
plus Non-recurring overhead
expenses (Management Estimate) |
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0 |
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Cash Contribution Margin
(Non-GAAP)* |
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$4,349 |
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plus One Time Events &
Projects Adjustment |
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656 |
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Cash
Contribution Margin (Non-GAAP) excluding One Time Events |
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$5,005 |
*Excludes R&D Expense, SG&A Expenses |
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Reconciliation from Revenue and Cost of Revenue to Adjusted
EBITDA (Non-GAAP) |
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($ in 000s) (Unaudited) |
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Q2 2022 |
Cryptocurrency revenue (GAAP) |
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$8,676 |
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Cost of cryptocurrency revenue
(GAAP) |
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10,109 |
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plus Total Depreciation
and Amortization (GAAP) |
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7,914 |
less Non-site Related
Depreciation and Amortization |
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2,376 |
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plus Project Equipment
Repairs |
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0 |
plus Prepaid Lease Cost |
|
244 |
plus Legacy Hosting
Contribution Margin |
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0 |
plus One Time Projects &
Events Adjustment |
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656 |
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less Total SG&A
(GAAP) |
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7,249 |
plus Non-site Related
SG&A |
|
4,849 |
plus One-time SG&A
Expenses |
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0 |
plus SCI Non-Cash Stock
Expenses |
|
302 |
Site-level
Adjusted EBITDA (Non-GAAP) |
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$2,906 |
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plus Non-site Related
Depreciation and Amortization |
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2,376 |
less Non-site Related
G&A |
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4,849 |
less Prepaid Lease Cost |
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244 |
less One Time Projects &
Events Adjustment |
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656 |
plus SHI Non-Cash Stock
Expenses |
|
762 |
SHI Adjusted
EBITDA |
|
$296 |
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