Back Mar 31, 2020 - Press release

Hut 8 Reports First Quarter 2020 Financial Results

TORONTO, ON, May 11, 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 first quarter ending March 31, 2020 (“Q1-2020”). Hut 8 reports all amounts in Canadian Dollars unless otherwise stated.

A conference call has been scheduled to discuss the Company’s Q1-2020 financial results, hosted by Interim CEO Jimmy Vaiopoulos, starting at 10:00 a.m. ET on Monday May 11, 2020.

Date: Monday, May 11, 2020
Time: 10:00 a.m. ET
Dial-In: 1 (866) 215-5508, Canada 1 (888) 771-4371, US
Passcode: 4968 1245

Q1-2020 Highlights

  • Quarterly revenue of $12.7 million from mining 1,116 bitcoin
  • Mining profit margin of 1% was much lower due to the bitcoin price collapse of 48% in two days in mid-March
  • Adjusted EBITDA of negative $558k
  • Completed the refinancing of the Bitfury debt with a loan extension from Genesis Global Capital, LLC at a 2% lower coupon rate
  • Renegotiated master agreements with Bitfury which lowered operating costs and provided autonomy to purchase mining equipment from other suppliers


Q1-2020 Overview

The coronavirus pandemic of 2020 (“COVID-19”) laid its heaviest tolls across the global economy this year, and Hut 8 was no exception. On March 12, 2020, there was one of the largest drops in global capital markets history when the S&P 500 and Dow decreased by nearly 10% in one day, and bitcoin decreased by 37%. The bitcoin price dropped to a low of US$4,107, a level last seen in April of 2019.

For Q1-2020, the Company mined 1,116 bitcoin, resulting in revenue generation of $12.7 million, an increase of 5% from the three months ended March 31, 2019 (“Q1-2019”) with 2,405 bitcoin mined with revenue of $12.1 million. The increasing network difficulty impacted the Company’s production negatively with much fewer bitcoin mined.

Expenses for Q1-2020 were $692k, compared to Q1-2019 of $747k, excluding a reversal gain of non-cash share-based payments of $708k million, compared to Q1-2019 expense of $1.1 million. The reversal is a result of a forfeiture of Restricted Share Units grant by the outgoing CEO.

For Q1-2020, Hut 8 had a revaluation loss of $1.3 million compared to the same period of the prior year gain of $1.0 million. This was from adjusting the value of the digital assets held in inventory to the market value on the reporting date. This loss is from the decrease in bitcoin price from US$7,194 on December 31, 2019 to the March 31, 2020 price of US$6,439. However, by taking advantage of the increasing bitcoin price during the first half of Q1-2020, the Company was able to sell bitcoin for fiat at a higher market price than its adjusted cost base, resulting in a realized gain on use of $0.9 million for Q1-2020, compared to Q1-2019 loss of $0.3 million.

Hut 8 recognized a loss of $0.6 million in Adjusted EBITDA, compared to Q1-2019 loss of $1.3 million. The Adjusted EBITDA losses from Q1-2020 came from the last two weeks of the quarter when the bitcoin price collapsed.

The upcoming bitcoin halving is a major event for bitcoin this year and is also on management’s radar. The halving, set to occur shortly, will have the impact of cutting miners bitcoin compensation per block reward in half. 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 halvings. However, how these two factors play out is difficult to forecast. Management is actively seeking ways to mitigate these industry specific factors.

In addition, Hut 8 announced the appointment of Kyle Appleby as Interim CFO in place of Jimmy Vaiopoulos, who was previously appointed Interim CEO. Subsequent to his appointment as Interim CFO, Appleby was relieved of his duties as Corporate Secretary and replaced by Viktoriya Griffin. Griffin has significant experience as CFO of various public companies in Canada and is a member of the Chartered Professional Accountants of British Columbia.

This release should be read in conjunction with the Company’s unaudited condensed consolidated interim financial statements and corresponding MD&A for the three months ended March 31, 2020 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 utilizing 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:

Jimmy Vaiopoulos
Interim Chief Executive 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.

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