CLSK - Earnings call transcript Q2 2021

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Natasha Betancourt

Welcome everyone On behalf of CleanSpark, Inc. I welcome you to our Second Quarter 2021 Financial Results Conference Call. My name is Natasha Betancourt. I'm CleanSpark's Chief of Staff. With us today with prepared remarks are CleanSpark's Chief Executive Officer, Zach Bradford; and Lori Love, our Chief Financial Officer.

a like information, everyone this the forward-looking that would exception with presentation I and statements historical risks of matters involve beginning, to that remind the are uncertainties. Before of number discussed in The from statements. actual significantly those results company differ the of could not a products, future can contribute competitive to company's ability timely to current to achieve in the or are and factors, company's skilled continue products the that produce productivity. continued company's demand market differences the include, to the to fashion, Factors to such attract for personnel ability growth, new improve of ability levels and cause to retain and but or the limited the company's company's ability sustain and – may These and uncertainties forward-looking statements differ actual vary are risk to materially. results subject in this expressions and project intend, words will, anticipate, to Inc. the similar potential, believe, call, CleanSpark, could, expect, When estimate, should, as relate they used statement. such as a forward-looking are that Investors are actual all involve differ forward-looking results statements cautioned and that those by CleanSpark, may to Inc. cause from anticipated uncertainties risks at time. this information factors in and company's quarterly Exchange filed is reports Securities risk on and the the annual Commission. with contained the Further company's and

its the and filed to comparable sec.gov GAAP most excludes website. company the XX-Q, financial available reconciliation that GAAP CleanSpark's measures management non-GAAP call on in measures May for note May for from performance full On XX, release financial press non-GAAP expenses company's will a to which refer please Finally, XXXX, results. today's its of which the Please to CleanSpark measures. certain on its financial refer Form XXXX XX, is

on this to announcing already call. not company The release cleanspark.com/investor-relations/news-releases. the release release look be done a as the issued on may press so, a We our may financial results at wish of press have summary results. provides found press this the at may who also call, Participants

ask like turn a remarks, your that to your bottom to the question Q&A. short over the of prepared I call questions Bradford. Zach Please section up screen. CEO, open to we would enter the the feel free under at Following will our With for a said,

Zach Bradford

and much, Thank call. Good you you afternoon for our thank very joining Natasha. everyone

Chief Natasha the guiding mining today pleased our revenues revenue reaching the will Lori CleanSpark, results fiscal more first As Q&A. of And business let quarter. our we growth. since company before development business began We has I Love, addition financial with The begin the a quarter periods enhanced another our joined principle quarter am then been second dramatically Officer. for I XXXX brief highlights by our Financial of of breaking record Bitcoin its significant company. to Lori profitable were run noted, reporting the and comparable our I our a than milestone This was activities. through including achievement profitability year. continue over and doubling Achieving has prior of trend will

energy costs surrounding energy achieving approaching our the carbon the trends, a energy profitability comment necessitates that speak business which segment still encountering some also are in will specifically strong fiscal in growth The battery goals believe The very a the chain only call. constraints sales. increase the are energy in quarter ESG strong confidence which certain of of the impacted both in whole rapid want year-to-date on improve global for lowest segment. speak and are deployments. industry mining we're path about an of as first This presentation. Revenues I energy storage, further we at Bitcoin the neutral, only nation. later our I Bitcoin our Lori guidance, our in and will later increase and for in energy are show growth so a carbon we XX% more to continue to has the mining strategy. even that. is We the in to in segments us we temporarily and neutral, traded business mining States United company that to supply cryptocurrency on publicly mines gives is our Not timing long-term seeing doing we some the

Fortunately, energy the ability these with solution technology and storage as hardware enhanced our suppliers. work flexibility enabling agnostic of our to multiple has constraints, manage vendor us a to

of further December for delivering supply a we and the executed products to meet six to of avoid in our strongest global energy able contracts our business experienced. backlog secure supported $XX of to shortage. company to the million over We approximately interruption $XX to XXXX. secure normalize month over battery now million be the the million We with deployments we energy the expect storage in year has XXXX, March expect now supply expect be energy for We this of this And expect but The million that we the global next the products have steps funding, fiscal $X.X revenues position, quarter will balance to quarters. the those of we energy and of end our near $X.X increase was revenues to and to through all chains have large supply the $XX.X taken quarter period. ability to in for ever the contracts on solutions. in supplies remainder future total by we the total beyond XXXX deliver for further quarter were secured ended of million two demand contracted anticipate significantly segment of The

total seeing revenues which approximately for the are the accounted sector, energy the last of XX% business We residential quarter. growth in strongest

and revenues total by product expected summer this released to the expect increase summer Southern products connected residential we revenues to XX% XX% to further our over quarters. next is expand late to XXXX. largely The to energy mVoult of rollout mVoult We the two in expect be next to to are our quarters line. over two customers California growth being that

demand continue to activities to see industrial and begins clients expect business also increase commercial from the to as U.S. We post-pandemic. normalize

completed to year be also several in several be are to projects We completed will we currently on this on that fiscal close more XXXX. executing scheduled and commercial expect

that our about The extremely we the Now segment. and we future. achieved future are We and system believe support and for results our trust of the bullish expectations exceeded Bitcoin blockchain have to are initial we mining the blockchain our of have all society onto important are facilitates. proud that technologies

production capacity current a petahash now XXX Our exceeds second.

arrive achieve to the within are installed. expect coming May as capacity petahash XXX We our production shipments and in month

arrive rigs SXX latest We as follows. also Bitmain Pro generation have to the Antminers and SXX scheduled

X,XXX per units June, X,XXX units to coming coming September. through X,XXX XXXX units units in XXXX, X,XXX in units in X,XXX fiscal July, August in receive July month expect have In we and We coming September then over upon through August by XXX X.X per exahash X.X XXXX. installation XXXX. units to increase October exahash These of half rate and expected in to deliveries over month are our and to

to of XXXX In in the XXXX. receive June X,XXX Avalon SXXs, addition to expect rigs we

annualized day would put which this Bitcoin or in rates, $XXX price result revenue seven $XX,XXX, per time exahash difficulty X.X that price result per would in this in September prepared. which Bitcoins presentation to by It all exahash revenue. to a we million of in day, $XXX current was of million million Bitcoins price perspective at in to $XXX was per in to would in $XXX,XXX million in million XXXX per to achieve or revenue. to at the $XX,XXX $XXX,XXX So day $X.XX at would annualized rates at difficulty XX a X.X Further the XX result million nine of again, day, at current $XXX to which Bitcoin $X.XX would result

online continue capacity us further. have increase energy at our the available We to power. Bitcoin capacity completed in parallel that bringing mining with mining additional summer expanding company's the We capacity and currently on expect work to our power increase facilities allow anticipate this to total to equipment

to Bitcoin to nationwide. further using mining States that have neutral. commitment with in is United intend we our believe improve this, only carbon energy costs increased mine at public also the We we energy. today, mining carbon company possible. the is the to footprint that Again, lowest lowest become our free are goal carbon the XX% Again, we With to

that done at responsibly Our sustainably, a profit. and prove Bitcoin be intention mining can to substantial is

to microgrid Atlanta our is onsite at first this facilities later expected completed year. project be also Our

hour to Our power outages. substation during the for reboot plan just a connection Even backup lose and power. a rigs. network that is switches. often the cause with microgrid take to power or is to and outage outages mining These second install significant are may our live This will momentary important network caused utility if cause their pool switches resilient local because the a resulting disruptions an microgrid or rigs will momentary that than has systems provide drop the more reconnection can mining blips, keep two when the some which can

this funding these be mention and as was increasing underwriting want outages. of and March we gross over it million Bitcoin result can focus will us, deducting of costly Overall, created proceeds few like solution has a I a underwritten and increasing turn It's continue within operators operational believe outages the offering utility before company mining few large Lori. an and for this we public and to before been quarter our Bitcoin to pay strategy to first This significant and fees. that closed a like energy our may I Overall, excellent activities. the itself XXXX, additional and In combined in For profitability expenses certainly received microgrid energy highlights catalyst. growth. on solutions $XXX

chains charging capital expanded to load and We companies. rapid and products. our operations. rigs electric grown team companies now large now deployed purchase XX the portion vehicle their in our is In initiatives, and to our using charging marketing in software sales as supply services for We securing solutions the that Also, aid to to also grid initiative. our with energy have Bitcoin of have seen critical a XX of employees station along EV now expand of growth OpenADR today. are management We've mining our mining for support

the up added as will in as year to activities brand marketing believe exceptional assets XXXX. be we all key a future and our to our across are will Finally, expands. record investments mentioned business development important and We've marketing efforts business be and continue our and activity during platforms. sales significantly what expanding stepped talent, we've These

We continue such will as the and high in believe leaders this to be quality, long-term high the respected integrity CleanSpark. that industry winners

we continue shareholders. way the as industry long-term will for our for leading value We the create

All of energy in modern ability challenges. us at CleanSpark our pride to ourselves solve

and recognized brand. respected a have We

a intelligent is that facility CleanSpark market, XX% have of and have capable flexible position product and solutions we neutral. Bitcoin We carbon extremely delivering the sustainable and to advantages Mining profitable the a well for cutting line, future. edge highly These

through run to financials. Love Lori CFO, our to over our it turn me let Now

Lori Love

morning, you, good Thank Zach, and everybody.

Let me segments comments make and growth. a to specific brief our operating few

For business the March our individually. ended XXXX three quarter discuss segments that XX, will from was derived revenue I

discuss including first our – services. segment which is segment, switch recently most The equipment, solution our launched residential Energy provide gear want sales software and to switch built and solutions, I

March we $X.X XXXX projects, pandemic. attribute ended of further segment, the you months for section attributable detail in to I of recently which for the This our produced filed million decrease XXXX. product six XX, million review six XX-Q website. the MD&A ended visit segment the offerings the the encourage This our to revenue months compared For reduction is to March our on to $X.X in XX, or commercial

million, in $X.X For from were million for period. months $X.X same segment to our the three compared ended XXXX revenues the this

of the earlier for discussed commercial line decrease business. the As was our reason

provide for our commercial quarter. subsidiary, resume wholly pXklabs largely with to development six is consulting ended projects expect The company's software companies. the and months Agency backlog and $XXX,XXX March our XXXX. We marketing Revenues They other that services ended design, for the internal to was with to design owned compared Segment. $XXX,XXX Digital technology-based months delayed this XX, associated coming were segment services six in all the in CleanSpark

the For to XXXX XX, XXXX. for three months $XXX,XXX March compared XX, revenue was $XXX,XXX ended March

resources the see on in this segment, moderate pXk focus only internally. we to to the expect utilization We as of of growth continue

segment of total for our produced made-up in Mining six XX% the Currency which of Digital $X.X our Finally, revenue, million month revenue period.

expect $XX.X our comparable three For the revenue and for for consolidated same our our ended of XX, that revenue Holistically, for September new significant CleanSpark trend the a ended and the March XXst, to March in than to Due our achieved there three year period contracted million, months which six are energy the the of capabilities. exceeds revenue was XX year-to-date March the mining further company business as for Comparatively no XX% segment XXXX. XX, and backlog fiscal doubled segment CleanSpark its in months this ended six was of year the revenues entire the on to ended $X.X quarter. revenue for last previous we its months mining begins more XXXX. which its company deliver continue deployment being million

we XXXX. nearly Our by cost cost evident margin our revenues, while The high XXst $X dramatically million to improved of months such continue the six efforts efforts revenues and to results increasing on focus March as with double an associated margins of of are revenue revenue compared our March XX, in reduction more ended for than streams.

XXXX to months of $X.X million were $X.X experienced fees compared for decrease. We six representing a revenues XX, XX, compared increase $X.X of million three our ended to cost the XXXX. $X.X professional For March ended the in March an months million million

March million and ended fees. fees XX, in the fees The ending pending periods month expect We resolve March six XXst legal is quarter we actually XXXX. coming legal to XXXX as mostly attributable decrease months three approximately the in compared certain matters. our increased legal three these XX, March the $X.X to by increase For to

to million and increase $X.X to This ended employees XXst by the to March months March based significant $X.X by million XXXX, due compared stock and increased an for the XXXX. increased XX, six XX, for months compared in the costs March in expenses payroll three Our XXst increase and associated compensation. is March ended

now spanning headcount stands XX employee all Our at entities.

the the ended gains income in Bitcoin Also gains $X.X of on is organization included in of months six unrealized million other securities by the for on driven million. XXst, primarily figure this $X.X sales Additionally March of reported XXX,XXX.

For on $X.X Bitcoin up months XXX,XXX. of other that income million bulk a of gains made on gain the sale, million realized ended three was with securities the and unrealized $X.X of of a

$XXX,XXX quarter, in also million, loss to $X.X an time net the the million. improvement CleanSpark for represents which $X for but We net of not compared first income the posted a the year-to-date net history, year-to-date. For reported company's only income nearly of of

posted For ended the income we XXXX, an $X.X net net which million of of the loss three nearly three improvement months for $XX ended $X.X months XXst March of is to million. a March XX, million compared

earnings For the of quarter ended $X.XX loss share a basic March reported share XX, XXXX per one-short $X.XX we of per ago. just from year

debt with $XXX has $XXX net continued has grow working to and company cash of limited capital in in total and and $XXX The with sheet balance million excess – stronger over stronger million. only Our improved million million. liabilities $X.X of has assets of

and the deliveries XXX have will XXX,XXX deposits installed expected also revenue million along coming quarter, April company into We in with $XX.X the has Since that more and mining SXX the equipment. in Xst, current be received deployed for inventory weeks. with converted in of Pro's

our XX-Q. numbers, my on refer commentary on speak please to For and our further want to feel reported to our context to Form today free financial now I expectations. outlook

for expectations increasing are revenue our XXXX As we a and strong trends of the year. our result updating fiscal

million XXXX expected to $XX revenues business million $X fiscal between agency in to digital and to in expect energy $XX million continue – achieve business achieve fiscal achieve to XXXX. is our our We in

$XX to overall Bitcoin expect We guidance. to year, most between an in and expectations since revenues million million of is mining $XX achieve million recent this $XX increase which $XX million our in

recognized fiscal in remain as to combined data projections the These based to quality price final extremely that Bitcoin fluctuations expect still we result forecast $XX,XXX and by is as an a while revenues difficult between million off actually future in revenues our XXXX. from will Bitcoin future a to points million shareholders. are and company. in affect $XX conservative as of is to to intend forecasts providing the achieve point $XX our As result performance. We volatile, possible it average

it there We have our have delays occur are results affect could for anticipated, and we delays our equipment If could included delays, shipment in significantly than mining be the are negatively in and potential better, longer no forecast. our forecast. if do

Our as call, of resilient, guidance and increase demonstrates to XXXX. contracted $XX million all begins pandemic for pent-up sales remained our energy and the backlog of from strong offerings. directly to to solutions million focus in backlog the date the sales administration also our segments December We increase distributed green our on as million as $X.X of an our improve and this aggressively new $XX.X at demand increase for is believe the expanded of newly energy mining This non-Bitcoin increase has attributable our executed team approximately of the as initiatives. our their

We continue in of mined believe a increase time. we as continue to strategy will Bitcoin Bitcoin intend value to that also holding the we with over

are we Bitcoins our the from we sheet. hold result, a to As yield generate balance methods pursuing on

confidence business me conclude Let in outlook. our by reiterating Zach's long-term

We to be have I yet through we quarter-over-quarter over continued execute that results. pandemic, turn Q&A. With the supply will to while call are moderating chain and delivering record-breaking constraints, navigating like who Natasha to a would the

Natasha Betancourt

Thank up you, like and questions from audience. to to initially I then up open our analysts our open Lori. would

an from Bitcoin is: plan Our if first Amit side? M&A, side so, the be to company the balance pursue or How question of the to is analyst use Wainwright. The the business targeted sheet? the Will from will micro-grid Dayal, you mostly question does to H.C. those continue

Zach Bradford

way are additional be creative, I'll definitely take Amit. always ahead question. for through M&A. are that We're question, Great and that than M&A. Thanks, in and to things quicker is go there Natasha. times when grow We looking pursuing certain interested there can no

the and an actually M&A where the we has are an an that an to have can M&A both impact like both actually from on Bitcoin. impact see energy on strategy in interested sides really We perspective. We

that impact it's will make the has facility space through we the need lead an can example. Bitcoin us on whether an that the through is it's microgrid perfect in A entering So negotiations December whether or acquisition utility to energy our services. did we

keeping on absolutely seeking We're we're though. eye M&A. and So an conscious value evaluations very

have to do develop we interested we report so, in things using as market, that purposes. as ability our and for So will sheet M&A balance but absolutely to the we're

Natasha Betancourt

you, Thank Zach.

Amit. We operating expenses equipment question all have will What deployed? from another be once is planned expansion

Zach Bradford

actually the question. actually, the expect answer a we have That's to a flat and is I fairly great it it, energy costs. with And that of it think – exception good remain we

number the mining So cost one Bitcoin energy. of is

will days the we it as make hours miners good weekends obviously we're sleeping XX Bitcoin a does as as any Bitcoin value, and otherwise thing day, seven but it on about best take absolutely have we – week, a we in, expense. already personnel so mine works. still while And the we're The active, But energy. plug not use more more more we generating additional

the different least We clock additional expansion and shouldn't that work really any significant OpEx or need expenses. additional have shifts at around we

Natasha Betancourt

you, Thank Zach.

additional Our the mining next Are looking actively from And Shawn energy analyst question Water sites? Research. for at, profiles at at these facilities? what Tower look is you do

Zach Bradford

Absolutely.

for We energy have. in have everything to sources beyond space and energy are to very an do actually expanding in active have the The we're facilities. carbon and profiles this. – how much interest the attention to We paying additional clearly that looking have impact with cost,

bit we're we the frankly So judging on. this those are site is that a looks little and a every look different. case-by-case at factors main two sites scenario But that

based confidential purposes. when low we to carbon there course them those, on get based there sites carbon or to we're a keep that have power that some on to costs. going neutral, I'm to the not them are we at And benchmarks are look energy to neutrality. side on get cost of or immediately using going But the to close certain our but Now path to have for full be XX% their, it's same per

Natasha Betancourt

Zach. Thank you,

mining? How how will the Bitcoin it from do Shawn. question And do Another you increase think difficulty you foresee yields? impacting quickly in

Zach Bradford

it's at of And costs. was it If XX% the low I the a can But designed throw efficiencies to about great the difficulty to being Bitcoin truly going the XX wall, next that to block-chain into way That's us difficulty I'd question. change. and always Obviously adjusted. to XX%. how interesting decent quickly months. I predict over And is none the thing seek difficulty that was a and say see increase think out dart a we're will

difficulty when equipment, see And using today same said, have going we to be won't the are the that difficulty Now has the exit are participants increases, efficient underlying power like will succeed with which also users most profits market, expensive the increases. that attention like long-term. will that costs lowest ours, is be it's and the that here energy that ours there the it paying that because are to to latest costs really the when

not may we're of other long-term from way there that's point think citizens a be ESG sure least be parties And long-term. we years completely but exit, though even we're an making we increase at those to regulatory long-term, going of will to some, the know be. decades, that even there's view, a going a and offsets in of that's that not there's certain So from going sustainability, point sense difficulty at profitability view, corporate months focusing that to about why profitable be from for market actually not responsible be some and we'll metrics, on in we're that the Again being profitability where and when this going perspective. participants it's to we thinking least will still think offset sure, and we're on

Natasha Betancourt

Thank you for that.

buying we Lewis with mining His from Greg have BTIG. questions another is So is: equipment at for market analysts, few near-term the first opportunity what deliveries? question

Zach Bradford

very all acquired through way We That's I July the entered high be a for all had market is up through the very delivered time. coming good being call what and those. a very the of actually how what the lot there's paid we way I'd timed deliveries it secondary we the it were the and purchasing. dealer of our machines that say through going newest to the actually well. mining did and market Getting feel market. delivered. In that's that question. through, all And difficult We the the We great a premiums started March was machines end I'll really are are secondary actually

were able aggressive So and the wasn't secondary as to compared paying still we dealers to manufacturers, it has of now. premium mark-up we market, from a or to were direct although what miners the the it in is as as

everything we of maybe that So paid have what just market. had have from put new why double would we we need facility the pay we it's supply to to two about more delivered and current ago a our secured actually have and now for of we outfit example, months XXXX October that's in the right that important to beyond And we in expect facility.

to So it have say partners. but strategic I to suffice difficult, guess it's we key

We moves to pricing. with those preferential get also dealers some have made

that time buy the market. that of a if a So where they supply bulk, in a they're then agreements Because get the in dozen selling have they we're in pricing at time offer at market, thousands would a instead would better we entire going at things, hundred or the to a to their time. we maybe

also of that a feel positioned to but a we've dealers the have on ourselves So with also that the we dibs everything, kind supply. have, secured few long-term we first of

although supply other with happy to what participants. So seeing as And now, same ability constrained, not the also of long-term. in we're the we're buy secure some really constraints but we're our things it's finding

Natasha Betancourt

Thank you.

BTIG. at Greg from question Another

the and quarter? you side, little the in mining microgrid any of side you cost the the On bit. reporting on the breakout terms Is the side structure cost there can a changed of provide

Zach Bradford

general, it. still to our mining reporting give is That's can see the and insight give what goods industry it's fluctuates and in obviously in the space doing say day We better. we're to how price on insights aligns between obviously it can the cost mine XX% Yes. our is But we us really just at at I Bitcoin it, some on that. the in how over and costs revenues COVID the you'll that with reporting use – fairly measured costs profit Bitcoin things. margin conservative, current of reporting some on Jason our I that margins Absolutely. what the term report actually and and is, because changes; we

again, below costs are all So our $X,XXX. in

$X,XXX plans the below certain believe we further Our more broadly with market actually have to push with our a or we'll taking coming to that, going efficient. and sorry, that with we're energy costs even make those month, to steps that more much And the operations $XX,XXX but we are make some $X,XXX. discuss in down we're with quite

it what the I XX%. can that right side, say, blended energy around As is relates now is do we're our to margin targeting

a bit all seeing I further right are We margin and break the margin our we'll but across next segments. board. all profile little our the future, different the was And in earnings by Obviously those think energy reported call, in improvements give way business we a in out little is insight more. the that we'll very strong now across

Natasha Betancourt

that. for you Thank

the questions over competitive now miners? the What to be will audience. is from Bitcoin advantage the on We moving

Zach Bradford

actually do in a necessarily like side, we competing interesting that like really be competing for on we're energy the you consider would – when not same Especially That's customers someone question. the example. for if way

internal I do your really that metrics own that so how is And using. it with has to you're position

think costs. areas. advantage So two really miners other our all-in in I is our is Bitcoin against found competitive One

run to costs. the We've the energy low the, in have also They're We disclosed those what We very of it. into that – kilowatt. are. other costs balance $X.XXXX efficient. it go And but comes

So secondly ESG we compete we have think are look to I you managing our initiatives. cost think I extremely. at how But

the just in because all until to miners New of shut carbon in proposed bill A last Let's they impact. York California that was announced look environmental down what Bitcoin at week. may review have was pass an

has been position always this. Our

that's what's be can and can or You and self-govern governed, either be you responsible, happened.

a people natural or coal in too the gas public. creating I up think about just to with like Bitcoin that. their boisterous or be that energy starting whether are carbonaceous, plants, well back intentions it the some And turn little on space you things know, sit been have parties that may doesn't

will to So to us in like have long-term, succeed corporate we'd and active say or doing waved be that even the carbon our being catch the we we'd be won't it the responsible do, was in-line to up. citizen world we're If think we'll approach cases we're companies first Georgia. take you an to through first and in-line for I in issues you can same wait can if prepare same again, for a navigate free, that be Georgia and I to we how to because do thing, think and XX% either at tell plus

because don't to have about. don't footprint. our We that's carbon us think about have a advantage shut a worry to risk we significant competitive over very down trying to have somebody we So I worry big that

Natasha Betancourt

Thank you, Zach.

how Our cost is the for being improve? is next forecasted What's guidance? Bitcoin risk there cost? in higher Are opportunities the to the per question

Zach Bradford

right question. great of actually a baseline kind a now, we're X,XXX as cost. Bitcoin using That's a Again,

reasons. systems, is in energy efficient impact an that taking long-term go energy also two costs, expect miners. to to most again, down but Our have our solutions we our expect we add are the for use One we to to steps we

we come or an coin have the costs SXX say new should I our online. more Pro, the on improvement per to So, we see actually Pros as expect SXX of

those miners. majority fleet replacing energy the now more future performing is the the by newer I will efficient. just exchange at in things an the and not actually it's And can selling I run We we're that market, miners we are steps we miners most and the efficient. performance, them we which on of lower do, said, be less mean sell large do will those take but ones likely And higher those the in but robust so to so right going of Like it generation for market, steps our into we what performing going a are to gain take minors it's to believe expect improved. in very a metric also are be really terahash, to efficiency efficient with

a for as at some change. point could far there the costs, is for energy that As risks example, higher costs always in future risk,

We, facility risk. of could of We obviously that conscious the for a a so have which year, we're five-year very different have a place are that's far pretty in course, out in metrics. new of facility contract We're first looking that. cost that

Bitcoin managing So think advantage but cost also core. an pricing, we're energy of we at ours are why that can't that avoided, there an company are be that we increasing That's per risks of it. it's our actively Bitcoin

energy. So the we understand

power not new we for into facility, caught So know it purchase that accept facility a what when means. We're get a gotchas. and the we we agreement by to walk going

So actively feel there those in – in we the we're decreasing we but are actually and see spot like anything risk, future. main happen, managing a can ones is I we're those those in great the absolutely

Natasha Betancourt

Thank you, Zach.

you one how for lose that if in you Bitcoin in is power out? that lose next income of for hour, that Our much question do it's hour

Zach Bradford

course may hour I'm as of Great only question. impact. simple how our we production things, if much how intend you other intend to so it but going and broad use would in fairly the down actually them, facilities, offer make and to one comparison then for of And it's this and not take kind to miners it really large some imply we to to to it it comes

I'll for say in and round was and $XX,XXX lost So hour, revenue they down one a somebody $X,XXX. were if use they day producing numbers just

more. in single or if us, $XXX,XXX If hour, lose could it $XX,XXX we remember you're day, some a that it's like means that X.Xx a for of you're a you're losing grow I a single in gets earlier, if and numbers that as outage out now $XX,XXX, said and number an the we facility hour $X,XXX bigger, hour of that's about

but microgrid, fruit we're largest to an on that. that their creating size, easiest that's that move impact entire on going go more we're as to an into to analyze switches cost, give solve low is probably the so problems everybody its everybody for that actually takes the a the lot going we is it addressing what's make to try and is we actually the how resiliency, to addition and that reason solve your problem buck. kind first can Bitcoin resiliency, site So in – but is as going cares with and full to miners about but the There backup. other we can bang area And it's depend hanging a chose the of

Natasha Betancourt

The revenue help a goal fund is, the the long-term Bitcoin Thank you, use is to business? to side question Zach. microgrid of the next

Zach Bradford

on we million We me. the lining answer two pick deploy believe quarter. easy do projects $XX a to mentioned well. up. energy the ourselves large past We'd true off projects seen back mentioned that in for to of earlier We've of million some this and dual are that. Absolutely. in consider and an beginning it next That's Things $XX intend presentations how really had we I next call. and over that very used an on and grow to side-by-side. really expect are we to threat quarter businesses really the I up the have deployed. impact pandemic expect We delays

to take we to That's to profitability coming And its balance to grow grow energy own business stronger. we're balance it, absolutely the on you funding do energy profitable Frankly, that we us completely but we look expect now, positions so to leverage intend this inside into the to want the extent have. market, sheet at that on with if a having to on in that company two where or we're benefit sheet it the we Bitcoin we have quarter different the leverage side-by-side, now sheet two. big so. We the businesses the balance much have going and a the

really happens balance mentioned, because that We have the without balance storage sheets. None larger as access of secure, contracts to I sheet. energy of strong

now we to hand. again company company. positioned go are intention our And before as than to were is hand our behemoth create so energy of going – participation an because this that of in going a is a much threat dual it's better We to real Bitcoin

Natasha Betancourt

you. Thank

guidance is, microgrids other question revenue? currency energy you included consulting or next miners revenue fall in the other providing crypto and do digital Is anticipate installing and/or this for services? under Our would it revenue

Zach Bradford

Great I ways whether for that now, it consulting we think things. There's other for talking funny, whether variety to lot lot in variables. services of be energy to what's mining about Right microgrids, other question. a and a of you're offer it of would or There's be companies, we plan it's a guidance. Absolutely would together. can work

going how do energy part just much may intend dive that of it not services to it relate but our I'll miners. leave or into to, to to we So at what offer other I'm it, that

relates it Now side the energy buckets. fall to the as revenue under would that revenue

So, our digital currency revenues are just going to be mining revenues.

energy, So everything we under fall related be that on that to else side so would do bucket. anything would

Natasha Betancourt

Thank process? question inclusion speak to you. you XXXX Russell in The the is, next can

Zach Bradford

we I cutoff that view bit have that cap Russell from of that on be that understanding, announcements and effect understanding market just Yes. control June published full I too understanding, the about have month. over day We And the My to public occurs, will there it. different in little view included comment From is cutoff. and my the that much. as about company. for measured my the a requirements the excited that don't that, so on – possibility forth. and and XXXX. today obviously a a some my anticipate don't can't I'm get then of speak is I'll I say the included. positive of public preliminary in Outside can occur if And end going point that to the a buy-in at process the of it results very could anticipate being be the and of based is timings I point

Natasha Betancourt

at color should CapEx we Is facility process builds and could around the think now microgrid final this you location? Atlanta? our provide And out the this you. question, a at in about how to some microgrid your Thank multi-phase deployment

Zach Bradford

and question. interconnections. Great variety both that the absolutely stuff we're permitting doing, the with and then It's happens process from what a or a but be view multi-stage also reasons point of for of going about to can local utilities

our the completion So it. make I we're to as energy with the actually that happen trying as that microgrid expansion of it We're before, to intention get of close part mentioned to our it and intention possible. is doing currently as actually our the switches done

be So do first end point, throughout that the then the we to permits from that solar of could microgrid intend depending, facility. complete additional start this summer. adding And by

as tell of a what shutting real we power, and we solar how megawatt of and we and that that What this of intention works neutral out that center do shifting think means empty free. out one have it. XX% top X% with a roof to solar so point at result the carbon the they're we will on of big what at are a is that is Our coal-fired that and working plants, like least a be we'll them truly add great would on off design our is at power we on a with at utility least Based the time need and carbon offsets we data expect facility.

have. So it's roof about space XX,XXX square feet we of

with we're think to that. be that So going that able I to achieve

that. going is see microgrid it the for neutrality. to forward, we but work, one phase further that Phase different about that some the – then to backup technologies working to energy for because of switch I are to it's how add details reach there, some still won't absolutely approach have be additional the microgrid, that really testing three And and design two we is interact designs backups. be stage we I ways how be savings. So from can to microgrid Atlanta smaller been going how carbon comment any point solar best our going for cost at to to make two on a We've phased we'll on facilities. as out deploy we

Natasha Betancourt

closing Thank you, our the participation over I you Zach, to thank mic our like Zach, for would CEO, everyone pass remarks. and in now your for Q&A. to

Zach Bradford

you. Thank

as energy while to me disruptive profitability the let growth industries seek both Bitcoin close, being solutions. to reiterate our focus So best-in-class we out on and and

wave you distributed be the will the we and participants trusted develops, support expect market entrusted your further continued the you and mining. have of as for long-term being for positioned our with the this that We importantly, citizens. our us support the and of responsible industry-wide CleanSpark of we As investment again remain quality and grateful confident want of ESG the deeply there today. dollars. our or On business post-pandemic with corporate growth. commitment CleanSpark, continue appreciate to to all on of focus the as lead strategy such to stakeholders being strategy on microgrid growth in energy with organization, to our to We industry growth on our profits cryptocurrency capitalize significant good us remain We investors we entire most to companies thank call their behalf building be opportunities express

Natasha Betancourt

That portion you, Thank our call. the concludes Zach. Q&A of

I Please call, this to like company's for we replay everyone instructions available later the available to today's would refer today. Before that replay be today's earnings and will remind via for release end call website. press dial-in

concludes Thank us today. this earnings can our This You www.cleanspark.com/investor-relations. call. at you joining for find

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CleanSpark (CLSK) 8 May 212021 Q2 Earnings call transcript