BitFuFu Inc.

Ladies and gentlemen, thank you for standing by for Bitfufu's full year 2023 earnings conference call. At this time, all participants are in the listen-only mode. After the matchments give their prepared remarks, there will be a question and answer session. As a reminder, today's conference call is being recorded. I'll now turn the meeting over to your host for today's call, Ms. Yang Song, Managing Director of Christensen. Please proceed, Ms. Song.

Good day, ladies and gentlemen, and welcome to Bitfufu's full-year 2023 earnings conference call. The company's financial results were released earlier today and are available on IR website as well as Gold Newswire services. Joining me today on the call are Mr. Leo Lu, Chairman and CEO, and Chia-Jiao, Financial Controller, who will both be available to take your questions in the question and answer session that follows. Before we begin, please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities and Litigation Reform Act of 1995, statements that are not historical facts, including statements about the company's beliefs and expectations are forward-looking statements. Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from the management's current expectations. Potential risks and uncertainties include but are not limited to those outlined in the company's public findings with the SEC. The company does not undertake any obligation to update any forward-looking statements, except as required under applicable law. I would like to now turn the call over to the company's CEO, Leo. Please go ahead.

Hello, everyone, and thank you for joining us today on our first Earnings Call as a listed company. We are extremely excited to have completed our business combination with a rise at the beginning of March and the joint ranks of the leading digital asset companies listed on Nasdaq. This was a huge milestone for us as we enter the next phase of growth. As of today, the price of Bitcoin has reached around $70,000. Bitcoin total market cap is now around $1.38 trillion. I remember when I was first introduced to the digital asset industry in 2017, when the price of Bitcoin was somewhere around $3,000. Over the years, despite having gone through several dumb cycles, the industry remains on the path of overall growth The number of Bitcoin holders and the adoption acceptance and the appreciation of digital assets continues to increase. I'm grateful that I was able to get involved in this industry back in 2017. I would like to take this opportunity on our first earning call to provide you with an overview of our business and highlight several key points. To begin with, what exactly is a cloud mining service? What does the offer to both customers and the industry? Why has it grown so fast and what has BitFufu done? In 2020, I founded BitFufu with the goal of creating a leading company that offers cloud mining service to digital assets customers worldwide. Traditionally, individuals looking to buy Bitcoin have had two options, purchasing it from spot prices directly from exchanges like Coinbase or Binance, or purchasing equipment to mine Bitcoin themselves. Both options require a substantial upfront investment mining typically offers lower acquisition costs but it requires precise control of cost and the efficiency these process challenges offer individuals such as purchasing mining machines and their arranging transportation installation hosting monitoring and maintenance to ensure consistent and stable operations while difficult for individual, this is easier, professional miners with a substantial scale and expertise. Bfufu offers a third and a more affordable option to customers with cloud mining services. All they need is a login to their Bfufu account and the purchase. Hash rate for the desired period of time. The platform then began to mine Bitcoin without any hassle. We believe this is the most efficient and convenient way for customers to obtain Bitcoin at a reasonable cost. Selling and purchasing cloud hashrates benefits both people and their customers. For the service providers, it generates upfront working capital to expand a scale of operations while at the same time hedge against the Bitcoin price volatility. Pre-selling hash rate at a fixed price allows Bitfufu to secure future revenue regardless of future prices. Customers benefit from potentially lower costs instead of purchasing Bitcoin directly from exchanges. For example, Let's see the cost to mine one Bitcoin over the next 180 days is $100, while the price of a Bitcoin is $200. In this scenario, we sell computing power to mine one Bitcoin for $150. This strategy allows us to lock in gross profit of $15 over the next 180 days. Regardless of Bitcoin's price volatility during that period, this allows the customer to secure the necessary computing power to mine one Bitcoin over a fixed period of time at a lower price than the spot market on the date of purchase. Throughout 2023, demand for cloud mining services grew consistently. Regardless of Bitcoin price movements, we dynamically adjusted service pricing as the price of a Bitcoin moves. This allows us to attract institutional and individual customers during periods of low prices and boosting user engagement when prices surge. Our advanced management and the real-time monitoring system ensure reliable and effective services. We maintain reserve of computing power to offset any service disruptions to guarantee stable mining operations for customers. Precise management of our computing power enables us to provide customers with computing power to cast profiles that meet their requirements. Our system also allows us to rapidly allocate hash rate between cloud mining and self mining. Thanks to our solid system and outstanding management, We consistently live up to our goal of delivering real and efficient computing power to each customer who opts for BitfuFu's cloud mining services. Since inception just four years ago, BitfuFu has grown substantially. I believe this reflects increasing recognition of the value we offer customers through cloud mining solutions. Bitfufu today is one of the world's leading digital asset mining service providers. Our hash rate surged over 100% to 22.9 extra hash as of December 31, 2023 from 11.1 at the end of 2022. Revenues also grew 43% year-over-year in 2023, reaching $284 million. At the end of 2023, our hosting capacity increases to 515 megawatts across 24 sites and three continents. We believe that we are one of the most diversified miners in the industry. Our innovative approach has attracted interest from some of the most notable companies in the industry. Early on, Bitmain, the manufacturer of the market leading on the miner, invested in Bitfufu and continued to support us with an additional pipe investment in connection with our business combination last month. Our partnership has evolved over the past two years. We acquire computing power and mining hardware from Bitmain and distribute them to our clients. This collaboration has promoted us to the status of Bitmain's S-class client for mining machinery and its exclusive strategic partner for cloud mining solutions. Additionally, Enpool, a world-leading Bitcoin mining pool, also participates in the PIBE investment. We are excited to expand our partnership with Enpool We believe that we are ideally positioned to forge additional partnerships with leading industry players in the coming years. Our business model offers significant competitive advantage over traditional Bitcoin mining business. When mining costs are low, traditional mining business self-mines. But when mining and power costs increase, these cells spare power capacity instead of mining. Selling computing power typically generates higher returns than selling power. Our unique combination of cloud mining and self-mining allow us to generate high profit margins when compared to traditional Bitcoin miners. We believe that the demand for cloud mining services will continue to grow going forward. This business provides us with substantial and stable revenue streams, a stable supply of computing power, and a minimized risk in a highly volatile market. Our ability to allocate mining capacity between self-mining and cloud mining services, between leased and owned miners, based on our assessment of market dynamics and strategic predictions, drove the rapid growth in our cloud mining business in 2023. Building on the movement we gained over the past year We will continue to leverage our advantages in this sector to expand operations and cultivate new partnerships with industry players. We have developed expertise in mining facility management and maintenance. Our partnerships with BIMEN and others has also enhanced our team's hosting and operations capabilities. Building on this deep knowledge we have accumulated, we plan to expand our offerings going forward by offering mining facility management services. We have allocated resources and are developing a mining facility management platform which we plan to integrate with our current monitoring system to increase operating efficiency We will also offer these to third-party mining facilities. Our business model going forward will include cloud mining solutions, self-mining operations, hosting services, and the management system solutions. Our goal is to grow alongside the industry, continually serving the global digital asset mining industry and delivering value to our customers and the shareholders. I look forward to updating you on the progress we are making in the coming quarters. I will now turn the call over to Kala to go over our financial for 2023.