Earnings Labs

HIVE Digital Technologies Ltd. (HIVE)

Q3 2022 Earnings Call· Tue, Feb 15, 2022

$2.32

-5.51%

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Same-Day

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1 Week

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1 Month

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Transcript

Holly Schoenfeldt

Management

Good morning, everyone. I would like to welcome you to today's webcast reviewing HIVE Blockchain Technologies Financial Results for the 3 months ended December 31, 2021. On Slide #2, disclosures. Except for the statements of historical fact, this presentation contains forward-looking information within the meaning of the applicable Canadian securities legislation that is based on expectations, estimates and assumptions as of the date of this presentation. You can see the full Slide #2 on your screen for the full disclosures. On Slide #3, you will see our most popular visuals, the DNA of volatility. And I would like to hand the presentation over to Frank Holmes, Executive Chairman, at this point to explain more. Frank?

Frank Holmes

Management

Thank you, Holly, and thank you, everyone, and all shareholders that are listening. Yes, this visual is an important one because volatility is a thing that always concerns a lot of people, especially if they're not traders. The traders love the volatility. But what's important here to recognize is this is nonevent for 70% of the time for the S&P to go up or down 1%; in over 10 days, plus or minus 2%. Gold is the same on a 1-day basis, but a little more volatile over 10 days. But then we start to go to technology stocks like Tesla, and we see all of a sudden it's 4x more volatile than the S&P 500. At one time, it used to be 6% daily volatility of Tesla until it became part of the S&P 500. But what you can see here is that Tesla and Bitcoin have very similar DNA volatility. And Ethereum is actually the most volatile when you compare it to the 1 day, it's 5%. And we see the 10-day is 17%, and MicroStrategy is plus or minus 6% on a daily basis and 10 days is 22%. But HIVE, it is even greater than all of them. It's 7x more volatile on a daily basis; in over 10-day period, it's 27%. So traders love that. What happens because of this for us, because we mine Ethereum and the volatility of Ethereum gets embedded. And we have seen this happen with gold stocks, and we have seen gold stocks move with their gold/silver ratio that they can have a greater volatility because silver is more volatile than gold. Silver stocks are more volatile than gold. So Ethereum is like silver. It's more volatile than Bitcoin. And it shows up in the overall stock price. So I…

Aydin Kilic

Management

Thank you, Frank, for that introduction. Indeed, it has been a very productive and active fiscal quarter. So I'm going to be providing an update on what the calendar year production looked like for HIVE amongst our peers as well. Recently, the January updates went out for the industry and the market. And so that's a more current snapshot of where things are. And of course, Darcy will follow up with the fiscal period results. So again, thanks for that excellent introduction, Frank. And yes, let's jump into the operational update. So as you can see here, we've got our infrastructure layout. So as of today, HIVE is operating 119 megawatts globally of green and clean energy. And so that's comprised of 50 megawatts at our flagship facility in New Brunswick. We actually had CBC News come out and do a video documentary in December, which was a great way to commemorate the completion of our third building, bringing the campus to 50 megawatts. Quebec, our long-standing facility in Lachute, holding steady at 30 megawatts. In Sweden, we've actually recently completed a 10-megawatt expansion. Originally, our building facility was 20 megawatts, so that brought it to 30. And we also have another facility in Northern Sweden that's additional 4. So that's -- we've got 34 megawatts in Sweden plus 5 in Iceland. So that's just today and always keeping busy, always expanding. So in spring -- and again, these are infrastructure projects. You could see here these -- our most recent building, miners were being installed. You could see the thermal isolation walls with the staff doing the cutouts for the miners. That's how part of our efficiency comes from whether it's our networking team, our coders, our staff at the mine remedying and repairing machines. We have people all…

Darcy Daubaras

Management

Great. Thank you very much, Aydin. And again, as Frank had mentioned, thank you very much to all the investors and shareholders that are interested in listening to us today. We're going to run through the financial statements for the third quarter ended December 31, 2021. As we've had for many quarters, we have a very strong and healthy balance sheet. We have $63.7 million cash on hand, over $26 million in investments. And what we're really proud of is the total current assets we've got of $268 million. Largest part of that, with the benefit we've had, with the increased production that we've got through our Bitcoin mining operations from Quebec and New Brunswick, being able to build up that HODL position and have digital currencies of over $168 million at the end of December 31, 2021, puts us in a great position moving forward. And we can also use that to fund our operations if we need to through the sale of coins. But as I've mentioned, we're HODL-ing quite a bit. Just taking a look at our gross mining margin year-over-year, comparing Q3 of 2021 fiscal to the Q3 fiscal 2020 that we just completed. As you can see, we've got over -- close to a sixfold increase, moving from $10.1 million -- or $10.6 million up to $61.6 million. Just the increase in the production we've been able to get has just been astronomical, and we're so proud of being able to what we've got done. As Frank had mentioned, being able to close those transactions during the COVID period has just strengthened HIVE moving forward. Taking a look at our actively as with these new additions, buying new miners. We continuously increased our hash rate in the last 3 months since September 30. We've increased…

Frank Holmes

Management

Thank you Darcy, and thank you, Aydin. And we just want to show you here that we have lots of rich content on information that helps people make an informed decision. And one of the big part, which we noticed in the past quarter, there was a fair amount of [ fuzz ] there, as they call, the spreading up fear, uncertainty and doubt regarding crypto mining sources of energy. The big shift that took place last year, tectonic shifts. And when you think of it, is the move to North America, in particular the state of Texas, has been a recipient as China closed down everything in mining. And what we've also seen in other jurisdictions is sort of this information that's out there regarding how much energy has been consumed. So what we did is we put it -- took Michael Saylor's presentation, which is about 30 minutes, condense it to 3 minutes with visuals and slides and put it in French, in Swedish, as you can see, in Spanish and in English for investors around the world that the consumption of energy by the crypto industry, a, is substantially less than originally reported; and b, a much greater percentage now is from much cleaner sources of energy. And still the bad locations for is Kazakhstan and, I think, some other sort of rogue nations that are out there. It's -- I guess I would think it's their only source of cash flow. But as a whole, the crypto mining industry has excellent CEOs today than what took place when HIVE first went public. And it's ushered in a great respect for a less carbon footprint, and I think that's only going to continue to grow. So we're happy to be part of the Bitcoin Mining Council and being part of education. So I highly recommend that -- we have investors from all over the world that you take in these visuals and share them. And do follow us. And if you have questions, please e-mail them in to Darcy, Aydin and myself, and we'll sure answer those as we can. I want to thank everyone, especially all the loyal shareholders that have lived with us for this volatility, those have believed in our vision, that [ can tune ] to mine Ethereum tearing because they're so profitable and then our vision to expand our footprint. And hopefully, we can have, in a very short order, more exciting news in our profile for growth. We're always working 24/7 so -- for the shareholders. Thank you, ladies and gentlemen. And thank you very much, Darcy and Aydin, for a spectacular year.