American Bitcoin reported net income of about $126 million for the third quarter, against a net loss of $57.2 million in the second, according to its results release filed with the SEC on Wednesday, 4 Nov.
The profit came from the coins it holds, not the coins it mines. The company booked a $197.3 million gain on digital assets in the quarter, after a $71.2 million loss on them in the second.
Mining itself earned less. Revenue fell to $63.4 million from $67.0 million, and the company says it cost about $42,100 to mine each bitcoin, up from about $36,500.
The business model, in one sentence: American Bitcoin mines bitcoin below the market price and keeps most of it, aiming to raise the amount of bitcoin behind each share.
The numbers
The company mined about 891 bitcoin, down from about 932, and received about $71,100 per coin. Gross profit was about $25.8 million, a margin of about 41%, down from about 49%. It blamed higher seasonal power costs.
Its holdings rose by about 425 coins to about 8,427 bitcoin on 30 Sep. Bitcoin per share, which it counts in satoshis, rose about 5% to about 11,572.
Chief executive Mike Ho said the company grew its reserve without selling shares through its at-the-market program or buying bitcoin in the quarter. It did sell part of its output to cover costs.
The skeptics
The company’s own figures give skeptics their material.
A $64.3 million loss on derivatives cut into the bitcoin gain. Adjusted EBITDA of about $221 million strips out that derivative loss but keeps the bitcoin gain, so it moves with the price of bitcoin rather than with mining.
About 3,090 of the 8,427 coins are pledged under agreements with Bitmain to pay for mining machines. The company is a majority-owned subsidiary of Hut 8 and lists its dependence on Hut 8 among its risks.
Peers are taking different routes. Riot this week reported lower mining revenue while leasing its whole Corsicana campus to Anthropic, as the network’s hashrate keeps climbing.
What’s next
American Bitcoin shares were down about 10% at $5.61 at 14:46 UTC on Thursday, from a $6.24 close on Wednesday, Yahoo Finance data show.
The company ended the quarter with about 89,242 owned miners and about 28.1 EH/s of capacity.
Related: On 5 Nov the AI-stock rout pushed bitcoin to $75,420 and hit miner shares
Related: Core Scientific expects to finish winding down bitcoin mining in the fourth quarter
This article is for information only and is not investment advice.