Quarterly Adjusted EBITDA tops $1.0
million, marking a second straight quarter of gains
Successful business model diversification
Quarterly Gross Profit Best in 4 years at $4.3
million
Soluna Holdings, Inc. (“SHI” or the “Company”), (NASDAQ: SLNH),
a developer of green data centers for intensive computing
applications including Bitcoin mining and AI, announced financial
results for the full year ended December 31, 2023.
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the full release here:
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FY 2023 Adjusted EBITDA by Quarter
(Photo: Business Wire)
"We are delighted to announce fourth quarter 2023 results, which
were the culmination of 18 months of incredible execution by our
operating team. We delivered record revenue and project-level
profit, a direct result of the ramping up of our flagship Project
Dorothy data center, and the new architecture of our business model
aimed at revenue diversification," said John Belizaire, CEO of
Soluna Holdings.
Fourth Quarter Finance and Operations Highlights:
- Record Revenue – Revenue ramped to $10.1 million compared to
third quarter 2023 revenue of $5.8 million, a 75% increase due to
the ramp of Project Dorothy. It was the highest quarter in the past
16 quarters.
- Record Gross Profit – Gross profit grew to $4.3 million, the
highest profit quarter since the inception of the crypto segment in
Q2 of 2020.
- 2nd Consecutive Positive EBITDA Quarter – Fourth quarter 2023
Adjusted EBITDA topped $1.0 million, up from $405 thousand in the
third quarter of 2023.
- Stronger Balance Sheet – Current Cash & Restricted Cash as
of December 31, 2023 was $9.4 million.
- Substantial Ramp of Flagship in Second Half – During this
period, Project Dorothy 1A and 1B generated $13.7 million of
revenue, which made up 65% of the Company’s total full year
revenue.
- Success in Diversification of Model – the Company completed a
series of architectural changes to the business to diversify the
business across four key areas, now including hosting, mining,
ancillary services, and artificial intelligence. This greatly
decreases the company’s direct exposure to the volatility of
Bitcoin Mining.
Belizaire continued, "2023 involved steering our ship through
turbulent waters, while simultaneously rebuilding the ship to sail
towards new horizons. 2024 presents numerous opportunities for the
Company. I am honored to lead a company with some of the most
resilient people in the industry. I am grateful for the patience
our shareholders have shown and the support our financial backers
have continued to provide."
"While there is more work ahead for our team, we ended 2023 on
much better footing. We have proven that our business model –
integrating with Renewable Power Plants – works and creates the
industry’s greenest, most profitable data centers. It is great to
be focused on growth again."
Fiscal Year 2023 Financial Results:
- The strong fourth quarter results of $10.1 million in revenue
represented a 75% increase as compared to the third quarter 2023,
had a significant positive impact on our full fiscal year
results.
- Total 2023 revenue was $21.1 million, a decrease of $7.5
million or 26% as compared to 2022 – The decrease was due mainly to
the impacts of the strategic realignment of the Company’s business
from a primarily Bitcoin mining focus to a more diversified revenue
stream that includes hosting, mining and ancillary services. The
negative impacts of winding down our less efficient mining
activities during the first half of the year were offset in part by
the positive impacts of ramping up our hosting and more efficient
mining activities during the second half of the year. Ramping up
during the second half included the design, permitting,
construction and energization of Project Dorothy 1A and 1B,
securing hosting clients, and acquiring miners. During this period,
Project Dorothy 1A and 1B generated $13.7 million of revenue, which
made up 65% of the Company’s total full year revenue.
- The total cost of revenue decreased $20.7 million from $36.5
million to $15.8 million – from 128% to 75% as a percentage of
revenue in 2022 compared to 2023 respectively, primarily driven by
closing higher cost facilities, switching to a data hosting model
from a proprietary mining model at Project Sophie and energizing
the lower cost Project Dorothy site.
FY 2023 Revenue & Cost of
Revenue by Project Site
(Dollars in thousands)
Project Dorothy 1B
Project Dorothy 1A
Project Sophie
Project Marie
Other
Total
Cryptocurrency mining revenue
$
6,849
$
-
$
2,984
$
769
$
-
$
10,602
Data hosting revenue
-
6,876
3,021
276
23
10,196
Demand response services
-
-
268
268
Total revenue
$
6,849
$
6,876
$
6,005
$
1,045
$
291
$
21,066
Cost of cryptocurrency mining, exclusive
of depreciation
$
3,358
$
-
2,206
801
-
6,365
Cost of data hosting revenue, exclusive of
depreciation
-
4,366
1,030
205
-
5,601
Cost of revenue- depreciation
1,816
755
1,154
136
2
3,863
Total cost of revenue
$
5,174
$
5,121
$
4,390
$
1,142
$
2
$
15,829
FY 2022 Revenue & Cost of
Revenue by Project Site
(Dollars in thousands)
Project Dorothy 1B
Project Dorothy 1A
Project Sophie
Project Marie
Other
Total
Cryptocurrency mining revenue
$
-
$
-
$
13,221
$
10,028
$
1,160
$
24,409
Data hosting revenue
-
-
-
4,131
7
4,138
Demand response services
-
-
-
-
-
-
Total revenue
$
-
$
-
$
13,221
$
14,159
$
1,167
$
28,547
Cost of cryptocurrency mining, exclusive
of depreciation
$
54
$
-
7,471
6,048
653
14,226
Cost of data hosting revenue, exclusive of
depreciation
-
54
-
3,518
-
3,572
Cost of revenue- depreciation
-
-
10,597
7,813
298
18,708
Total cost of revenue
$
54
$
54
$
18,068
$
17,379
$
951
$
36,506
- General and administrative expenses, excluding depreciation and
amortization, for the year ended on December 31, 2023, decreased by
$3.8 million, or 20% – to $15.4 million from $19.2 million for the
year ending on December 31, 2022. Stock-based compensation costs
were $3.7 million for 2023 for 2022.
- Salary and wages decreased by approximately $1.4 million during
the year ending on December 31, 2023 – compared to the year ending
on December 31, 2022, due to a reduction in employee recruitment
fees, headcount and personnel costs, and employee-related expenses,
i.e. travel.
- Legal fees decreased by approximately $1.1 million during the
year ending on December 31, 2023 – compared to the year ending on
December 31, 2022, due to less development agreements related to
Project Dorothy. In addition, potential capital raising activities
did not occur and other corporate related legal matters were less
intensive during the year ending on December 31, 2023.
- Consulting and professional services decreased by $1.6 million
during the year ending on December 31, 2023 – compared to the year
ending on December 31, 2022, due to required valuations of complex
transactions, advisory fees for complex accounting research
matters, and pipeline development project costs, in which the
Company involved multiple consultants to help build out future
plans incurred in 2022 which did not recur in 2023.
- Adjusted EBITDA improved to $(3.5) million for 2023 compared to
$(4.6) million in 2022 – For the three months ended December 31,
2023, Adjusted EBITDA increased by 157% or $0.6 million to $1.0
million compared to $0.4 million in the three months ended
September 30, 2023.
The audited financial statements and 10K are available
online.
Safe Harbor Statement
This announcement contains forward-looking statements. These
statements are made under the "safe harbor" provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by terminology such as
"will," "expects," "anticipates," "future," "intends," "plans,"
"believes," "estimates," "confident" and similar statements. Soluna
Holdings, Inc. may also make written or oral forward-looking
statements in its periodic reports to the U.S. Securities and
Exchange Commission, in its annual report to shareholders, in press
releases and other written materials and in oral statements made by
its officers, directors or employees to third parties. Statements
that are not historical facts, including but not limited to
statements about Soluna’s beliefs and expectations, are
forward-looking statements. Forward-looking statements involve
inherent risks and uncertainties, further information regarding
which is included in the Company's filings with the Securities and
Exchange Commission. All information provided in this press release
is as of the date of the press release, and Soluna Holdings, Inc.
undertakes no duty to update such information, except as required
under applicable law.
Non GAAP Measures
In addition to figures prepared in accordance with GAAP, Soluna
from time to time presents alternative non-GAAP performance
measures, e.g., EBITDA, adjusted EBITDA, adjusted net profit/loss,
adjusted earnings per share, free cash flow, both on a company
basis and on a project-level basis. Project level measures may not
take into account a full allocation of corporate expenses. These
measures should be considered in addition to, but not as a
substitute for, the information prepared in accordance with GAAP.
Alternative performance measures are not subject to GAAP or any
other generally accepted accounting principle. Other companies may
define these terms in different ways. See our annual report on Form
10-K for the year ended December 31, 2023 for an explanation of how
management uses these measures in evaluating its operations.
About Soluna Holdings, Inc (SLNH)
Soluna is on a mission to make renewable energy a global
superpower using computing as a catalyst. The company designs,
develops and operates digital infrastructure that transforms
surplus renewable energy into global computing resources. Soluna’s
pioneering data centers are strategically co-located with wind,
solar, or hydroelectric power plants to support high-performance
computing applications including Bitcoin Mining, Generative AI, and
other compute intensive applications. Soluna’s proprietary software
MaestroOS(™) helps energize a greener grid while delivering
cost-effective and sustainable computing solutions, and superior
returns. To learn more visit solunacomputing.com. Follow us on X
(formerly Twitter) at @SolunaHoldings.
Soluna Holdings, Inc. and
Subsidiaries
Consolidated Balance
Sheets
As of December 31, 2023 and
December 31, 2022
(Dollars in thousands, except per
share)
December 31,
December 31,
2023
2022
Assets
Current Assets:
Cash
$
6,368
$
1,136
Restricted cash
2,999
685
Accounts receivable
2,948
320
Notes receivable
446
219
Prepaid expenses and other current
assets
1,416
1,107
Equipment held for sale
107
295
Total Current Assets
14,284
3,762
Restricted cash, noncurrent
1,000
-
Other assets
2,954
1,150
Deposits and credits on
equipment
1,028
1,175
Property, plant and equipment,
net
44,572
42,209
Intangible assets, net
27,007
36,432
Operating lease right-of-use
assets
431
233
Total Assets
$
91,276
$
84,961
Liabilities and Stockholders’
Equity
Current Liabilities:
Accounts payable
$
2,099
$
3,548
Accrued liabilities
4,906
2,721
Line of credit
-
350
Convertible notes payable
8,474
11,737
Current portion of debt
10,864
10,546
Income tax payable
24
-
Deferred revenue
-
453
Customer deposits-current
1,588
-
Operating lease liability
220
161
Total Current Liabilities
28,175
29,516
Other liabilities
499
203
Customer deposits- long-term
1,248
-
Operating lease liability
216
84
Deferred tax liability, net
7,779
8,886
Total Liabilities
37,917
38,689
Commitments and Contingencies (Note
14)
Stockholders’ Equity:
9.0% Series A Cumulative Perpetual
Preferred Stock, par value $0.001 per share, $25.00 liquidation
preference; authorized 6,040,000; 3,061,245 shares issued and
outstanding as of December 31, 2023 and December 31, 2022
3
3
Series B Preferred Stock, par value
$0.0001 per share, authorized 187,500; 62,500 shares issued and
outstanding as of December 31, 2023 and December 31, 2022
—
—
Common stock, par value $0.001 per share,
authorized 75,000,000; 2,546,361 shares issued and 2,505,620 shares
outstanding as of December 31, 2023 and 788,578 shares issued and
747,837 shares outstanding as of December 31, 2022(1)
3
1
Additional paid-in capital
291,276
277,429
Accumulated deficit
(250,970
)
(221,769
)
Common stock in treasury, at cost, 40,741
shares at December 31, 2023 and December 31, 2022(1)
(13,798
)
(13,798
)
Total Soluna Holdings, Inc.
Stockholders’ Equity
26,514
41,866
Non-Controlling Interest
26,845
4,406
Total Stockholders’ Equity
53,359
46,272
Total Liabilities and Stockholders’
Equity
$
91,276
$
84,961
(1)
Prior period results have been adjusted to
reflect the Reverse Stock Split of the Common Stock at a ratio of
1-for-25 that became effective October 13, 2023. See Note 2,
“Accounting Policies,” for details.
Soluna Holdings, Inc. and
Subsidiaries
Consolidated Statements of
Operations
For the Years Ended December
31, 2023 and 2022
(Dollars in thousands, except per
share)
Year Ended
December 31,
2023
2022
Cryptocurrency mining revenue
$
10,602
$
24,409
Data hosting revenue
10,196
4,138
Demand response services
268
-
Total revenue
21,066
28,547
Operating costs:
Cost of cryptocurrency mining revenue,
exclusive of depreciation
6,365
14,226
Cost of data hosting revenue, exclusive of
depreciation
5,601
3,572
Costs of revenue-depreciation
3,863
18,708
Total costs of revenue
15,829
36,506
Operating expenses:
General and administrative expenses,
exclusive of depreciation and amortization
15,390
19,203
Depreciation and amortization associated
with general and administrative expenses
9,513
9,506
Total general and administrative
expenses
24,903
28,709
Impairment on equity investment
-
750
Impairment on fixed assets
575
47,372
Operating loss
(20,241
)
(84,790
)
Interest expense
(2,748
)
(8,375
)
Loss on debt extinguishment and
revaluation, net
(3,904
)
(11,130
)
Loss on sale of fixed assets
(398
)
(4,089
)
Other (expense) income, net
(1,479
)
22
Loss before income taxes from continuing
operations
(28,770
)
(108,362
)
Income tax benefit from continuing
operations
1,067
1,346
Net loss from continuing operations
(27,703
)
(107,016
)
Income before income taxes from
discontinued operations (including gain on sale of MTI Instruments
of $7,751 for year ended December 31, 2022)
-
7,851
Income tax benefit from discontinued
operations
-
70
Net income from discontinued
operations
-
7,921
Net loss
(27,703
)
(99,095
)
(Less) Net income (loss) attributable to
non-controlling interest
1,498
(380
)
Net loss attributable to Soluna Holdings,
Inc.
$
(29,201
)
$
(98,715
)
Basic and Diluted (loss) earnings per
common share (1):
Net loss from continuing operations
attributable to Soluna Holdings, Inc. per share (Basic &
Diluted)
$
(27.79
)
$
(187.63
)
Net income from discontinued operations
per share (Basic & Diluted)
$
-
$
13.22
Basic & Diluted loss per share
$
(27.79
)
$
(174.41
)
Weighted average shares outstanding (Basic
and Diluted)
1,313,718
599,301
(1)
Prior period results have been adjusted to
reflect the Reverse Stock Split of the Common Stock at a ratio of
1-for-25 that became effective October 13, 2023. See Note 2,
“Accounting Policies,” for details.
Soluna Holdings, Inc. and
Subsidiaries
Consolidated Statements of
Cash Flows
For the Year Ended December
31, 2023 and 2022
(Dollars in thousands)
Year Ended December
31,
2023
2022
Operating Activities
Net loss
$
(27,703
)
$
(99,095
)
Net income from discontinued operations
(including gain on sale of MTI Instruments of $7,751 for the year
ended December 31, 2022)
-
(7,921
)
Net loss from continuing operations
(27,703
)
(107,016
)
Adjustments to reconcile net loss to net
cash (used in) provided by operating activities:
Depreciation expense
3,894
18,731
Amortization expense
9,483
9,483
Stock-based compensation
4,225
3,673
Consultant stock compensation
87
179
Deferred income taxes
(1,107
)
(1,388
)
Impairment on fixed assets
575
47,372
Amortization of operating lease asset
238
202
Impairment on equity investment
-
750
Loss on debt extinguishment and
revaluation, net
3,904
11,130
Amortization on deferred financing costs
and discount on notes
753
6,538
Loss on sale of fixed assets
398
4,089
Changes in operating assets and
liabilities:
Accounts receivable
(2,620
)
211
Prepaid expenses and other current
assets
(306
)
146
Other long-term assets
(304
)
(29
)
Accounts payable
(862
)
553
Deferred revenue
(453
)
137
Customer deposits
2,836
-
Operating lease liabilities
(234
)
(197
)
Other liabilities
320
(308
)
Accrued liabilities
3,889
(374
)
Net cash used in provided by operating
activities
(2,987
)
(6,118
)
Net cash provided by operating activities-
discontinued operations
-
369
Investing Activities
Purchases of property, plant, and
equipment
(12,705
)
(63,684
)
Purchases of intangible assets
(58
)
(76
)
Proceeds from disposal on property, plant,
and equipment
2,286
2,605
Deposits of equipment, net
147
6,441
Net cash used in investing activities
(10,330
)
(54,714
)
Net cash provided by investing activities-
discontinued operations
-
9,084
Financing Activities
Proceeds from preferred offerings
-
16,658
Proceeds from common stock offering
817
2,858
Proceeds from notes and debt issuance
3,100
30,543
Costs of preferred offering
-
(1,910
)
Costs of common stock offering
(10
)
(504
)
Costs of notes and short-term debt
issuance
(1,057
)
(2,078
)
Cash dividend distribution on preferred
stock
-
(3,852
)
Payments on NYDIG loans and line of
credit
(350
)
(4,491
)
Contributions from non-controlling
interest
20,365
4,786
Distributions for non-controlling
interest
(1,002
)
-
Proceeds from stock option exercises
-
153
Proceeds from common stock warrant
exercises
-
779
Net cash provided by financing
activities
21,863
42,942
Increase (decrease) in cash &
restricted cash-continuing operations
8,546
(17,890
)
Increase in cash & restricted cash-
discontinued operations
-
9,453
Cash & restricted cash – beginning of
period
1,821
10,258
Cash & restricted cash – end of
period
$
10,367
$
1,821
Supplemental Disclosure of Cash Flow
Information
Interest paid on NYDIG loans and line of
credit
6
1,311
Interest paid on Navitas loan
204
-
Interest paid on convertible noteholder
default
617
-
Noncash investing and financing
activities:
Notes converted to common stock
6,013
3,295
Noncash disposal of NYDIG collateralized
equipment
3,137
-
Noncash non-controlling interest
contribution
2,095
-
Interest and penalty settled through
repossession of collateralized equipment
1,773
-
Warrant consideration in relation to
convertible notes and debt
1,637
14,602
Non-controlling interest membership
distribution accrual
517
-
Noncash activity right-of use assets
obtained in exchange for lease obligations
403
20
Promissory note conversion to common or
preferred shares
845
15,236
Noncash proceed on sale of equipment
240
210
Series B preferred dividend prefunded
warrant and common stock issuance
656
-
Noncash equipment financing
-
4,620
Proceed receivable from sale of MTI
Instruments
-
295
Non-GAAP Measures
In addition to financial measures calculated in accordance with
U.S. generally accepted accounting principles (“U.S. GAAP”), we
also use “Adjusted EBITDA.” Adjusted EBITDA is a non-GAAP financial
measure defined as net income (loss) from continuing operations
before interest, taxes, depreciation and amortization (“EBITDA”)
adjusted to eliminate the effects of certain non-cash,
non-recurring items, that we believe do not reflect our ongoing
strategic business operations. Management believes that Adjusted
EBITDA results in a performance measurement that represents a key
indicator of the Company’s business operations of cryptocurrency
mining and hosting customers engaged in cryptocurrency mining.
We believe Adjusted EBITDA can be an important financial measure
because it allows management, investors, and the Board to evaluate
and compare our operating results, including our return on capital
and operating efficiencies, from period-to-period by making such
adjustments. Non-GAAP financial measures are subject to material
limitations as they are not in accordance with, or a substitute
for, measurements prepared in accordance with U.S. GAAP. For
example, we expect that stock-based compensation costs, which is
excluded from the non-GAAP financial measures, will continue to be
a significant recurring expense over the coming years and is an
important part of the compensation provided to certain employees,
officers, and directors. Similarly, we expect that depreciation and
amortization of fixed assets will continue to be a recurring
expense over the term of the useful life of the assets.
Adjusted EBITDA is provided in addition to and should not be
considered to be a substitute for, or superior to net income, the
comparable measure calculated in accordance with U.S. GAAP.
Further, Adjusted EBITDA should not be considered as an alternative
to revenue growth, net income, diluted earnings per share or any
other performance measure calculated in accordance with U.S. GAAP,
or as an alternative to cash flow from operating activities as a
measure of our liquidity. Adjusted EBITDA has limitations as an
analytical tool, and you should not consider such measures either
in isolation or as substitutes for analyzing our results as
reported under U.S. GAAP.
Reconciliations of Adjusted EBITDA to net income from continuing
operations, the most comparable U.S. GAAP financial metric, for
historical periods are presented in the table below:
(Dollars in thousands)
Years Ended
December 31,
2023
2022
Net loss from continuing operations
$
(27,703
)
$
(107,016
)
Interest expense
2,748
8,375
Income tax (benefit) expense
(1,067
)
(1,346
)
Depreciation and amortization
13,376
28,214
EBITDA
(12,646
)
(71,773
)
Adjustments: Non-cash items
Stock-based compensation costs
4,312
3,852
Loss on sale of fixed assets
398
4,089
Loss on debt extinguishment and
revaluation, net
3,904
11,130
Impairment of equity investment
-
750
Impairment on fixed assets
575
47,372
Adjusted EBITDA
$
(3,457
)
$
(4,580
)
Stock based compensation costs represented approximately $3.4
million non-cash restricted stock units and $908 thousand non-cash
stock options for the year ended December 31, 2023 to members of
our Board of Directors and certain Company employees compared to
non-cash restricted stock units of approximately $2.6 million to
members of our Board of Directors and certain Company employees for
the year ended December 31, 2022 and non-cash stock options of
approximately $1.2 million for the year ended December 31,
2022.
The following table represents the Adjusted EBITDA activity
between each three-month period for the year ended December 31,
2023.
(Dollars in thousands)
Three months ended
March 31,
2023
Three months ended
June 30,
2023
Three months ended
September 30,
2023
Three months ended
December 31,
2023
Year ended
December 31,
2023
Net loss from continuing operations
$
(7,432
)
$
(9,257
)
$
(6,016
)
$
(4,998
)
$
(27,703
)
Interest expense, net
1,374
486
495
393
2,748
Income tax (benefit) expense from
continuing operations
(547
)
(547
)
569
(542
)
(1,067
)
Depreciation and amortization
3,002
2,918
3,579
3,877
13,376
EBITDA
(3,603
)
(6,400
)
(1,373
)
(1,270
)
(12,646
)
Adjustments: Non-cash items
Stock-based compensation costs
879
2,232
595
606
4,312
Loss (gain) on sale of fixed assets
78
(48
)
373
(5
)
398
Impairment on fixed assets
209
169
41
156
575
Loss on debt extinguishment and
revaluation, net
(473
)
2,054
769
1,554
3,904
Adjusted EBITDA
$
(2,910
)
$
(1,993
)
$
405
$
1,041
$
(3,457
)
The following table represents the Adjusted EBITDA activity
between each three-month period for the year ended December 31,
2022.
(Dollars in thousands)
Three months ended
March 31,
2022
Three months ended
June 30,
2022
Three months ended
September 30,
2022
Three months ended
December 31,
2022
Year ended
December 31,
2022
Net loss from continuing operations
$
(9,132
)
$
(14,104
)
$
(56,143
)
$
(27,637
)
$
(107,016
)
Interest expense, net
2,880
3,305
1,671
519
8,375
Income tax benefit from continuing
operations
(547
)
(251
)
(547
)
(1
)
(1,346
)
Depreciation and amortization
6,697
7,914
8,388
5,215
28,214
EBITDA
(102
)
(3,136
)
(46,631
)
(21,904
)
(71,773
)
Adjustments: Non-cash items
Stock-based compensation costs
955
1,064
890
943
3,852
Loss on sale of fixed assets
-
1,618
988
1,483
4,089
Impairment on fixed assets
-
750
28,086
18,536
47,372
Loss (gain) on debt extinguishment and
revaluation, net
-
-
12,317
(1,187
)
11,130
Impairment on equity investment
-
-
750
-
750
Adjusted EBITDA
$
853
$
296
$
(3,600
)
$
(2,129
)
$
(4,580
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240402401707/en/
David Michaels Chief Financial Officer Soluna Holdings, Inc.
David@soluna.io
Grafico Azioni Soluna (NASDAQ:SLNH)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni Soluna (NASDAQ:SLNH)
Storico
Da Gen 2024 a Gen 2025
