Release Date: May 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- LM Funding America Inc reported a significant increase in revenue, up 105% in Q1 2024 compared to the same quarter last year.
- The company achieved a net income of $1.9 million in Q1 2024, marking a substantial turnaround from a net loss of $7.2 million in Q1 2023.
- Positive core EBITDA of approximately $4.4 million was reported for the quarter ended March 31, 2024, compared to an EBITDA loss in the previous year.
- The company successfully expanded its Bitcoin mining operations, increasing its mining capacity to 639 petahash per second with the addition of new, efficient mining machines.
- LM Funding America Inc is exploring opportunities to lower mining costs and potentially expand operations to include hosting for AI machines, indicating strategic growth and diversification.
Negative Points
- Despite significant financial improvements and expansion, the market's valuation of LM Funding America Inc's shares remains low, with the stock price being less than a fifth of stockholders' equity per share.
- The company expressed frustration over the perceived undervaluation by the market, which could impact investor sentiment and stock performance.
- There are ongoing uncertainties and risks associated with Bitcoin's price volatility and regulatory changes that could affect future profitability.
- LM Funding America Inc is still in the process of transitioning from its legacy business to primarily focusing on Bitcoin mining, which may involve operational and strategic risks.
- The company has taken on debt to fund strategic initiatives, which could pose financial risks if the investments do not yield the expected returns.
Q & A Highlights
Q: Kevin Dede asked about the total number of machines reported in the press release, specifically if the 5,900 figure included the 300 new S. 21 machines and whether they were all operational.
A: Bruce Rodgers, CEO of LM Funding America Inc, clarified that the 5,900 machines were as of March and that the new S. 21 machines were added in April and May. He also mentioned the disposal of 200 older machines, maintaining the total number but increasing efficiency with the new additions.
Q: Kevin Dede sought clarification on the hash rate mentioned in the earnings press, querying whether it was 6.73% or 6.39%.
A: Bruce Rodgers confirmed that the correct hash rate was 6.39%.
Q: Kevin Dede inquired about the company's strategic focus on expanding hash rate versus attention to legacy business operations.
A: Bruce Rodgers emphasized that LM Funding is primarily focused on Bitcoin mining. He mentioned that the legacy business related to legislation is a longer-term consideration for 2025, suggesting a current primary focus on cryptocurrency.
Q: Kevin Dede asked about the possibility of LM Funding owning its infrastructure for Bitcoin mining or for high-performance computing applications.
A: Bruce Rodgers discussed the company's asset-light strategy but noted recent investments aimed at gaining more control over infrastructure up to the electric meter, indicating a strategic shift towards owning more assets while maintaining an overall asset-light approach.
Q: Kevin Dede questioned the plans for expanding the mining fleet and the discussions with hosting partners regarding pricing and contractual obligations post-halving.
A: Bruce Rodgers explained that the company is engaged in continuous negotiations with multiple hosting partners and is using strategic funds to gain more control over hosting infrastructure. He affirmed the focus on reinvesting in mining equipment to grow the business.
Q: Kevin Dede explored the implications of the mark-to-market ruling for digital assets on LM Funding's financials.
A: Rick Russell, CFO of LM Funding, detailed how the company has adopted the mark-to-market accounting model, which significantly impacted their reported gains, reflecting the fluctuations in Bitcoin prices.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
