Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
AI Revenue. Bit Digital announced revenue from its AI contract has started, a significant milestone, in our view. The AI business diversifies the Company revenue base from the mining operations and will provide a steady source of revenue with strong margin contribution. With the anticipated growth of the AI industry, we believe there will be more such contracts to come.
Details. As of yesterday, 192 servers, representing 1,536 GPUs, began generating revenue. An additional 64 servers, representing 512 GPUs, are expected to start earning revenue by the end of January 2024. The total contract value for the 2,048 GPUs is worth more than $50 million of annualized revenue to Bit Digital.
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Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.
Patrick McCann, CFA, Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Tweaking Q4. We are tweaking our Q4 revenue estimate lower from $173.5 million to $157.0 million, reflecting an expectation for lower revenue per kiosk. Our Q4 adj. EBITDA margin expectation is largely unchanged at 5.7% or $8.9 million.
Headwinds in California. California enacted a law effective January 1, 2024 that caps Bitcoin ATM transactions at $1,000. While this limit is well above the company’s median transaction size of roughly $200, it could affect its larger transactions.
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Gregory Aurand, Senior Vice President, Equity Research Analyst, Healthcare Services & Medical Devices, Noble Capital Markets, Inc.
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Large Growing Complex Medicare Market. About 66.4 million Americans were covered by Medicare in calendar 2022 and the Medicare 65 and older population is expected to reach more than 93 million people by 2060. GoHealth has already helped 10 million Americans and seeks to be the consumer Medicare health plan destination in this growing market. As the market grows more complex with a greater number of plan offerings, GoHealth’s platform simplifies the annual Medicare private plan shopping process.
Proprietary Offering Platform. GoHealth is driving growth in the Medicare Advantage and Medicare Supplemental markets through its pressure-free unbiased consumer-centric Encompass Solution platform that utilizes its proprietary data machine-learning PlanFit Checkup technology.
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Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Approval. The SEC approved rule changes to allow spot bitcoin ETFs that will enable regular investors to easily access the cryptocurrency. Already, some 11 firms, including such majors as Grayscale, BlackRock, Fidelity, and Franklin Templeton, are readying ETFs for the market. We believe the approval will drive demand, and hence pricing, for bitcoin higher.
Offering More Exposure and Regulation. With the approval of the bitcoin ETFs, the SEC is allowing for more institutional and retail investors exposure in bitcoin. A scenario whereby financial advisors recommend an allocation of a bitcoin ETF to investor portfolios is not a stretch, in our view. New regulation aimed at eliminating fraud and normalizing crypto also could soon follow.
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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Expanded Sales Team Will Prioritize Strategic Expansion as Bitcoin Depot Prepares for Continued Nationwide Growth to Increase Kiosk Installations and Strengthen Nationwide Access to Bitcoin
ATLANTA, Jan. 11, 2024 (GLOBE NEWSWIRE) — Bitcoin Depot (“Bitcoin Depot” or the “Company”) (NASDAQ: BTM), a U.S.-based Bitcoin ATM operator and leading fintech company, today announced the expansion of its workforce with the hiring of more than a dozen new sales representatives. These new team members are strategically located across the United States, including Hawaii and Puerto Rico, underscoring Bitcoin Depot’s commitment to nationwide growth and Bitcoin ATM (“BTM”) accessibility.
Bitcoin Depot expects each sales representative to play a pivotal role in the Company’s aggressive expansion strategy during 2024. Once fully engaged, the representatives are anticipated to secure roughly 100-200 new Bitcoin Depot kiosk locations on a monthly basis with the goal of expanding the number of installed BTMs by the end of 2024 to a record high for Bitcoin Depot.
“We are excited to welcome our new sales team members into the Bitcoin Depot family. Their diverse backgrounds and strategic retail relationships are integral to our mission of making Bitcoin accessible to everyone, everywhere,” said Bitcoin Depot Founder and CEO Brandon Mintz. “Integrating these new team members marks a key milestone in our journey to set a new record in Bitcoin Depot`s installed kiosks. Their dedicated efforts are essential not just for widening our geographical footprint but also for strengthening and deepening our relationships with retailers across the country.”
The new sales hires are part of Bitcoin Depot’s comprehensive growth plan, which focuses on increasing its BTM network and continuing to build a robust pipeline of major regional and national retail partners. This approach reflects the company’s ongoing efforts to make Bitcoin more accessible to the public and to solidify its position as a market leader in the Bitcoin ATM industry.
About Bitcoin Depot Bitcoin Depot Inc. (Nasdaq: BTM), founded in 2016, is dedicated to bridging the gap between traditional finance and digital currencies. The company offers user-friendly, efficient, and intuitive ways for consumers to convert cash into Bitcoin, enabling access to the broader digital financial system. With a presence in 48 states, Bitcoin Depot operates the largest network of BTMs in North America. Through its innovative services, including thousands of kiosk locations and the BDCheckout product, Bitcoin Depot continues to be at the forefront of fintech advancements. For more information, visit www.bitcoindepot.com.
Contacts: Investors Cody Slach, Alex Kovtun Gateway Group, Inc. 949-574-3860 btm@gateway-grp.com
Media Christina Lockwood, Brenlyn Motlagh, Ryan Deloney Gateway Group, Inc. 949-574-3860 btm@gateway-grp.com
Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Expansion. Before the initial 192 servers representing 1,536 GPUs have all come on-line, Bit Digital announced an expansion of its initial AI contract. Under the terms of the agreement, Bit Digital will supply the customer with computational power from an additional 512 GPUs for a period of three years. The total contract value with the customer for an aggregate of 2,048 GPUs is now worth more than $50 million of annualized revenue to Bit Digital.
New Order. Bit Digital placed a purchase order for 64 servers manufactured by Super Micro Computer, Inc. that are equipped with 512 Nvidia HGX H100 GPUs along with related equipment, which are expected to be delivered to the Company during January 2024.
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Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Production. During the month of December, Bit Digital produced 169.5 BTC, a 19% increase compared to the prior month. Active hash rate as of December 31st was approximately 2.52 EH/s, up from 2.25 EH/s as of November 30, 2023, and well on the way to the new goal of doubling the operating fleet in the Bitcoin mining operations, to approximately 6.0 EH/s, during 2024.
Staking. Bit Digital had approximately 12,752 ETH actively staked in native and liquid staking protocols as of December 31, 2023, down slightly from 12,784 at the end of November. Approximately 12,352 ETH were natively staked and 400 ETH were deployed in liquid staking protocols as of that date. The Company earned a blended APY of approximately 3.67% on its staked ETH position for the month, down from 4.35% in November, and earned aggregate staking rewards of approximately 38.5 ETH.
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Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
First Tranche. Yesterday, Bit Digital announced the receipt of the initial batch of servers equipped with Nvidia HGX H100 GPUs from Super Micro Computer, Inc. To date, the Company has received 89 servers which will be shipped and delivered to the datacenter in Iceland by the end of this month, enabling Bit Digital to begin performance under its first AI contract. Bit Digital expects to receive the remaining 103 servers by the first week of January 2024 and subsequently deploy them in Iceland during January 2024.
Upfront Cash. Bit Digital also disclosed that the terms of its AI agreement have been amended such that the Company has now received a three-month prepayment from its customer. With the contract expected to generate some $35 million of annual revenue, this would equate to approximately $9 million, which will help fund the cost of the servers, in our opinion.
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Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Increasing Production. During November, Bit Digital produced 142.7 BTC, a 24% increase from 111.6 BTC last month. The increase was primarily driven by the increase in the Company’s active hash rate, which was at 2.25 EH/s as of November 30, 2023 compared to 2.0 EH/s last month, and Bit Digital did not experience any maintenance outages.
Staking. Over on the staking side, Bit Digital had approximately 12,784 ETH actively staked in native and liquid staking protocols as of November 30, 2023. Approximately 12,384 ETH were natively staked and 400 ETH were deployed in liquid staking protocols as of that date. The Company earned a blended APY of approximately 4.35% on its staked ETH position for the month, and earned aggregate staking rewards of approximately 44.93 ETH.
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Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Contract. Last week, Bit Digital announced details regarding its first Bit Digital AI contract. Under the terms of the agreement, Bit Digital will supply the customer with computational power from 1,504 GPUs for a period of three years. The contract will commence January 2024 and represents more than $35 million of annualized revenue to Bit Digital.
Platform. To fulfill the contract, the Company placed a purchase order for servers manufactured by Super Micro Computer, Inc., an authorized Nvidia OEM, that are equipped with 1,504 Nvidia HGX H100 GPUs along with related equipment, which are expected to be delivered to the Company by January 2024.
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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
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Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Results. Bit Digital reported third quarter revenue of $11.6 million, up from $9.1 million last year and in-line with our estimate of $12 million. The Company recognized $11.3 million from bitcoin mining services and $244,780 in ETH staking services. Net loss for the quarter was $7.2 million, or a loss of $0.08 per share, versus the prior year’s net loss of $14.5 million, or $0.27. Adjusted EBITDA for the quarter was a negative $3.0 million versus a negative $4.6 million last year.
More Agreements. The Company finalized two new agreements with Soluna Computing and Dory Creek during the quarter, bringing 4.4 and 17.5 megawatts of hosting capacity, respectively. The agreements bring two new states to Bit Digital’s geographic portfolio in Kentucky and Texas, and offers the Company an increased geographic diversification. We expect more announcements to follow, with the Company having active discussions with other potential hosts.
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QuoteMedia is a leading software developer and cloud-based syndicator of financial market information and streaming financial data solutions to media, corporations, online brokerages, and financial services companies. The Company licenses interactive stock research tools such as streaming real-time quotes, market research, news, charting, option chains, filings, corporate financials, insider reports, market indices, portfolio management systems, and data feeds. QuoteMedia provides industry leading market data solutions and financial services for companies such as the Nasdaq Stock Exchange, TMX Group (TSX Stock Exchange), Canadian Securities Exchange (CSE), London Stock Exchange Group, FIS, U.S. Bank, Broadridge Financial Systems, JPMorgan Chase, CI Financial, Canaccord Genuity Corp., Hilltop Securities, HD Vest, Stockhouse, Zacks Investment Research, General Electric, Boeing, Bombardier, Telus International, Business Wire, PR Newswire, FolioFN, Regal Securities, ChoiceTrade, Cetera Financial Group, Dynamic Trend, Inc., Qtrade Financial, CNW Group, IA Private Wealth, Ally Invest, Inc., Suncor, Virtual Brokers, Leede Jones Gable, Firstrade Securities, Charles Schwab, First Financial, Cirano, Equisolve, Stock-Trak, Mergent, Cision, Day Trade Dash and others. Quotestream®, QModTM and Quotestream ConnectTM are trademarks of QuoteMedia. For more information, please visit www.quotemedia.com.
Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.
Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Solid Q3 results. The company reported Q3 revenue of $4.7 million, which was in-line with our estimate of $4.8 million and adj. EBITDA of $719,547, which was modestly below our estimate of $849,000, illustrated in Figure #1 Q3 Results. The slight adj. EBITDA miss was attributed to revenue mix and slightly higher than expected operating expenses. Notably, revenue and adj. EBITDA increased by 8.5% and 7.3%, respectively, from the prior year period.
Interactive Growth. The company’s interactive business had a strong quarter as revenue increased 16% from the prior year period, and does not include deferred revenue which increased 76% over the same period. Management attributed the favorable increase in revenue to large contracts that were recently signed. The company remains focused on signing larger clients, and has increased its headcount in its sales and marketing departments to support that goal.
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Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.
Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Solid Q3 Results. The company reported Q3 revenue of $179.5 million, up 2.7% from the prior year period, and adj. EBITDA of $13.9 million, up an impressive 21.1% year-over-year. While Q3 revenue was 5.7% below our estimate of $190.3 million and Adj. EBITDA was 4.9% lower than our estimate of $14.7 million, we view the results and company outlook favorably.
2024 Outlook. The company is focused on striking additional partnerships to deploy its approximately 1000 kiosks that are currently warehoused. We anticipate the number of kiosks will gradually increase over Q4 and 2024, a development we believe will have a favorable impact on operating results.
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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
