Hut 8 Reports 2019 Year-End Financial Results

TORONTO, ON, April 3, 2020 – Hut 8 Mining Corp. (“Hut 8” or “the Company”) (TSX: HUT) (OTCQX: HUTMF), one of the world’s largest public cryptocurrency mining companies by operating capacity and market capitalization, today announces its financial results for the year ended December 31, 2019. Hut 8 reports all amounts in Canadian Dollars unless otherwise stated.

A conference call has been scheduled to discuss the Company’s year-end financial results, hosted by CEO Andrew Kiguel and CFO Jimmy Vaiopoulos, starting at 10:00 a.m. ET on Monday April 6, 2020.

Date: Monday April 6, 2020
Time: 10:00 a.m. ET
Dial-In: 1 (888) 465-5079, Canada 1 (888) 424-8151, US
Passcode: 7760 654#


2019 Highlights

  • Annual revenue of $82.0 million from mining 8,618 bitcoin
  • Mining profit margin of 45%
  • Adjusted EBITDA of $33.5 million with an Adjusted EBITDA Margin of 41%
  • Increased petahash capacity by 19.6%
  • Repaid $5.3 million of outstanding debt
  • Refinanced a US$15 million debt facility to lower the coupon rate
  • Graduation to the TSX via TSX Sandbox
  • Achieved bottom line profit with net income of $2.1 million



2019 Overview

Despite volatile price swings for bitcoin in 2019, Hut 8 achieved revenue of $82.0 million, compared to $49.4 million in the prior year, a 66% increase. The reason for the increase was primarily due to Hut 8’s flagship facility in Medicine Hat coming online halfway through 2018 and the purchase of 12 additional BlockBoxes that became operational at the beginning of 2019. The resulting mining profit margin for 2019 was 45% compared to 50% in 2018.

Expenses for the 2019 year were $6.1 million of which there were non-cash share-based payments of $2.9 million. This was compared to the prior year with expenses of $8.8 million of which there were non-cash share-based compensation of $3.5 million. The Company’s focus is to be one of the lowest cost miners in the market to grow bottom line profit and best position itself for the next bitcoin pricing cycle.

Hut 8 recognized $33.5 million in Adjusted EBITDA, an increase of $19.3 million or 73% from the prior year. Hut 8 realized 41% of Adjusted EBITDA Margin in 2019 compared to the prior year of 39%. The increased Adjusted EBITDA Margin allowed the Company to self-finance growth of hashrate, while paying down its debt balance from cash flow generated from operations.

For 2019, Hut 8 had a revaluation gain of $4.3 million (2018 – loss of $17.9 million) from adjusting the value of the digital assets held in inventory to the market value on the reporting date. This gain is from the increase in bitcoin price from US$3,743 on December 31, 2018 to the December 31, 2019 price of US$7,194. The upward trend of bitcoin price in 2019 also meant that the Company was able to sell bitcoin at a higher market price than its adjusted cost base, resulting in a realized gain on use of $4.1 million for the year ended December 31, 2019.

“2019 was a milestone year for Hut 8 as we achieved bottom line profitability which allowed for growth in operating capacity and paying down debt,” said Jimmy Vaiopoulos, Chief Financial Officer of Hut 8. “We are proud to have had a successful first full year as a public company while also graduating to the TSX via the TSX Sandbox.”

The upcoming bitcoin halving is a major event for the industry this year and is also on management’s radar. The halving, set to occur in mid-May 2020, will have the impact of cutting miner’s bitcoin compensation per block reward in half. We expect that will cause many less efficient miners to shut off their miners unless the price of bitcoin significantly appreciates before then. The impact on Hut 8 is difficult to assess. Certainly, without a corresponding increase in the price of bitcoin, Hut 8’s revenue will be impacted negatively. If the price of bitcoin and the network hashrate remain flat, Hut 8’s corresponding revenue would be cut in half subsequent to the halving. Management’s expectation is that there will be a drop in hashrate as less efficient miners shut down, consequently reducing competition. We also anticipate that the price of bitcoin will appreciate post the halving as it has in the past two halving events. However, how these two factors play out is difficult to forecast. Management is actively seeking ways to mitigate these industry specific factors.

Management also continues to monitor the possible impact of the coronavirus (“COVID-19”) on operations.  Management has taken steps to mitigate the impact including setting up remote monitoring of the sites if required. Hut 8 takes COVID-19 seriously and is working with its site operators to keep the sites clean and employees safe.

This release should be read in conjunction with the Company’s audited consolidated financial statements and corresponding MD&A for the year ended December 31, 2019 filed on SEDAR and posted on the Company’s website.



Hut 8 is a bitcoin mining company with industrial scale operations in Canada. In total, Hut 8 owns and operates two sites in Alberta, Canada including 94 BlockBox AC data centers with current maximum operating capacity of 107 MW and 952 PH/s.

Hut 8 creates value for investors through low production costs and appreciation of its bitcoin inventory.  The company provides investors with direct exposure to bitcoin, without the technical complexity or constraints of purchasing the underlying cryptocurrency. Investors avoid the need to create online wallets, wire money offshore, and safely store their bitcoin.

The Company’s common shares are listed under the symbol “HUT” on the TSX and as “HUTMF” on the OTCQX Exchange.

Key investment highlights and FAQ’s:

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Hut 8 Corporate Contact:

Andrew Kiguel
Chief Executive Officer
Tel: (647) 256-1992

Jimmy Vaiopoulos
Chief Financial Officer
Tel: (647) 256-1992

Non-GAAP Measures

This press release presents certain non-GAAP (“GAAP” refers to Generally Accepted Accounting Principles) financial measures to assist readers in understanding the Company’s performance. These non-GAAP measures do not have any standardized meaning and therefore are unlikely to be comparable to similar measures presented by other issuers and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Management uses these non-GAAP measures to supplement the analysis and evaluation of operating performance.

The following terms are used, which are not found in the Chartered Professional Accountants of Canada Handbook and do not have a standardized meaning under GAAP.

EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization)

  • “EBITDA” represents net income or loss excluding net finance income or expense, income tax or recovery, depreciation, and amortization.
  • “Adjusted EBITDA” represents EBITDA adjusted to exclude share-based compensation, fair value loss or gain on revaluation of digital assets, write-offs, and costs associated with one-time transactions (such as listing fees).
  • “Adjusted EBITDA Margin” represents Adjusted EBITDA as a percentage of revenue.

EBITDA is used to show ongoing profitability without the impact of non-cash accounting policies, capital structure, and taxation. This provides a consistent comparable metric for profitability.

“Mining Profit” represents gross profit (revenue less cost of revenue), excluding depreciation. “Mining Profit Margin” represents Mining Profit as a percentage of revenue. Mining Profit and Mining Profit Margin show the cash expenses against the revenue without the impact of non-cash accounting policies such as depreciation.

“Cost per Bitcoin” represents cost of revenue excluding depreciation, divided by the number of bitcoin mined in the period. This metric is commonly referenced in the bitcoin mining industry and is important to gain an understanding of the profitability in reference to the price of bitcoin.



Certain information in this press release constitutes forward-looking information. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology, such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “assumes”, “anticipates” or “does not anticipate” or “believes”, or variations of such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might”, “will” or “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts, but instead represent management’s expectations, estimates and projections regarding future events.

Forward-looking information is necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by Hut 8 as of the date of this press release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in greater detail in the “Risk Factors” section of the Filing Statement dated March 1, 2018 relating to the Qualifying Transaction of Oriana Resources Corporation and Hut 8, which is available at These factors are not intended to represent a complete list of the factors that could affect Hut 8; however, these factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. The forward-looking statements contained in this press release are made as of the date of this press release, and Hut 8 expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.

Neither the TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.