Capgemini Se Ord

Good day and thank you for standing by. Welcome to the Bitdeer Q3 2024 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Yujia Cai from the Orange Group. Please go ahead.

Thank you, Operator, and good morning, everyone. Welcome to BitDeer's third quarter 2024 earnings conference call. Joining me today are Jihan Wu, Chairman and CEO, Matt Kong, Chief Business Officer, Harris Bassett, Chief Strategy Officer, and Jeff LaBerge, Head of Capital Markets and Strategic Initiatives. Harris will begin today by providing a high-level overview of Bitdeer's third quarter results, and then cover the company's strategy, as well as provide a detailed business update. After that, Jeff will cover Bitdeer's third quarter financial results in more detail, and then we will open the call for questions. Before management begins their formal remarks, we would like to remind everyone that during today's call, we may make certain forward-looking statements. These statements are based on management's current expectations and are subject to risks and uncertainties, which may cause actual results to differ materially from those expressed or implied in such forward-looking statements. For a more complete discussion on forward-looking statements and the risks and uncertainties related to the DEERS business, please refer to its filings with the SEC. Further, in addition to discussing results that are calculated in accordance with International Financial Reporting Standards, or IFRS, We will also make references to certain non-IFRS financial measures, such as Adjust EBITDA and Adjusted Profit. For more detailed information on our non-IFRS financial measures, please refer to our earnings release that was published earlier today, which can be found on Bidyear's Investor Relations website. Thank you. I will now turn the call over to Harris. Harris?

Thank you, Yujia, and good day, everyone. Welcome to our first earnings call since we became a public company last year. FITDAIR stands out in the industry with a unique value proposition, and we are excited to share the many developments happening at the company and walk you through the progress we've made since last quarter. Before diving in, I'd like to briefly highlight our Q3 financial results, and Jeff will provide more details in his section. For Q3, total revenue was $62 million. Gross profit was $2.8 million, and adjusted EBITDA was negative $8.5 million. This lower performance compared to Q3 last year was primarily driven by the impact of the 2024 halving, higher global network cash rate, lower hosting and cloud mining revenue, and higher R&D costs related to the one-off development expense of our Steel-02 chips. These negative impacts were partially offset by slightly higher average self-mining hash rate for the quarter and higher Bitcoin prices. While many of our peers have pursued a self-mining hash rate growth strategy, we pursued a more long-term strategy of first focusing resources on the development of our own ASIC technology. We believe this significantly differentiates our business from the rest of the sector in terms of our strategic positioning, revenue, and cost structure. In parallel, we strategically expanded our energy infrastructure pipeline to be online when our mining rigs are also available. This allows us to rapidly increase our self-mining hash rate using our own ASIC technology in the coming months and years. This strategic focus on technology has been a core part of our strategy and is driven by the DNA of our leadership team. which has a proven track record of founding and scaling successful tech companies. As we look ahead, we anticipate the industry moving towards commoditization, which will require Bitcoin miners to diversify and differentiate their business models in order to remain competitive. To this end, we are focused on building a vertically integrated business by developing industry-leading hardware and software solutions across our ASICs and AI cloud business lines. as well as ensuring geographical diversification across our global operations and supply chain. We are prioritizing strategic growth anchored in deep R&D to create a strong competitive moat around our business. With regards to our ASIC business, we have made significant strides in our product roadmap this year and are ramping up to commercialize our advanced seal miner ASICs to disrupt what industry experts have estimated to be a four to five billion dollar market annually over the next five years. We see strong demand for diversified ASIC solutions and suppliers. Commercializing our steel miner ASICs will enable us to enter this growing market, diversify our revenue streams, and significantly accelerate the growth of our self-mining business. Having our own ASIC mining rigs is a big step towards full vertical integration and will provide us with distinct advantages including a diversified revenue stream, lower cost structure, higher capital efficiency, and dramatically improved supply chain compared to the rest of the industry. We announced our R&D technology roadmap for our SEAL Miner products in early June and have already energized the first batch of SEAL Miner A1 mining rigs powered by the SEAL-01 chip. These chips are performing within our expectations. We began mass production in October and have plans to install 3.7 exahash in phases between December of this year and Q1 2025. This deployment will coincide with the energization of our TETL Norway Phase 1 project, as well as our hydro cooling lines at our Rockdale, Texas facility. In October, we successfully incorporated our SEAL-02 chip into our SEAL Miner A2 mining rig. including both air-cooled and hydro-cooled models. Testing of steel miner A2 mining rigs achieved 226 terahash per second for air-cooled and 446 terahash per second for hydro-cooled, with both having 16.5 joules per terahash efficiency. We commenced mass production of our steel miner A2, and the first production run is expected to deliver 18 exahash per second. which will be used for self-mining and selling to external customers. Notably, the commercial sale of SEAL Miner A2 will mark a significant milestone as we begin delivering these machines to customers starting in Q1 2025. We will continue to provide progress reports on our hash rate production as a commitment to maintaining transparency for all stakeholders, including shareholders, suppliers, and especially clients, who will need clear guidance to make their commercial decisions. In addition, we taped out our third generation chip with an industry leading target efficiency of 10 joules per terahash and anticipate initial sample wafers in Q2 2025. Looking forward, we remain fully committed to executing a successful market entry into the multi-billion dollar ASIC market in 2025. We are already engaged in discussions with a number of potential customers, and early demand is promising, indicating strong interest in our cutting-edge technology and the industry's desire for technology and supply chain diversification. We are excited to meet this demand and begin driving a differentiated and diversified revenue stream for our shareholders. Last but not least, I want to emphasize that we are planning to tape out a fourth-generation chip in the second half of 2025, which we are targeting to achieve an unprecedented 5 joules per terahash energy efficiency. We believe this chip, along with the third-generation chip, could position Bitdeer as the preeminent supplier of the most energy-efficient mining rigs on the market. We believe this will significantly strengthen our competitive position and unlock substantial value for our shareholders. Now moving on to our AI cloud business. Our NVIDIA DGX SuperPOD system in Singapore achieved around 98% utilization in September, establishing ourselves as a leading provider of advanced AI computing solutions in Asia. We possess strong capabilities in deploying AI infrastructure and offering cloud platform services such as bare metal, virtual machines, and serverless GPU. These support computing across multiple regions utilizing both our own and third-party assets. We have also recently expanded our GPU cloud capacity into Canada. Our cloud services business model and technology allows us to collaborate with partners to scale quickly in response to customer demand. Demand has been steadily increasing for our GPU cloud services, and we are positioning Bitgear to serve the rapidly expanding market of companies focused on LLM training and inference. catering to small and medium-sized companies as well as large corporations. In terms of our energy assets, we are actively exploring opportunities to leverage our global power capacity of 2.5 gigawatts to capitalize on the significant boom in demand for power for HPC and AI data centers. In July, we engaged TLM Group, a leading consultant in HPC and AI data center development. to perform a comprehensive suitability analysis on each of our sites. TLM Group completed their feasibility assessment of our U.S. sites and confirmed the suitability of several of them for Tier 3 HPC and AI data centers. These sites have abundant power available in a short timeframe, low latency fiber, and plentiful water resources. We have commenced discussions with development partners and potential end users for these sites. A shortage of reliable power for AI data centers is a critical challenge for the industry, and we are well positioned to leverage our substantial power capacity to meet this growing demand. We are actively collaborating with leading data center developers and advisors to secure long-term partnerships and strategic opportunities that can position Bitdeer to play a significant role in the rapidly evolving HPC and AI ecosystem. Moving on to the build out of our additional 1.6 gigawatt electrical capacity and infrastructure. Construction across our global sites continues to progress steadily. This quarter, we incorporated more detailed updates into our monthly production reports to provide greater visibility into the status of our infrastructure expansion. The 40 megawatt phase one expansion at Tidal Norway remains on schedule to be energized in December 2024. In Rockdale, Texas, the 100-megawatt hydro cooling conversion has been delayed by one month due to supply chain impacts from the U.S. dock workers' strike in early October. Phased energization is now expected between January and March 2025. Meanwhile, the 500-megawatt project in Jigmeleung, Bhutan is advancing well with the primary substation expected to be completed by Q1 2025. With these projects and other projects, such as Phase 2 of TETL Norway and Phase 1 of Clarington, Ohio, we are poised to bring over 1.1 gigawatts of new power capacity online over the course of the next year. In summary, we have many exciting milestones on the horizon. We remain on track to deliver our steel miner A2-A6, substantially grow our self-mining fleet at a competitive cost advantage, and leverage our industry-leading global power portfolio. I'll now turn it over to Jeff LaBerge, our head of capital markets and strategic initiatives, to go over our financial results for the quarter.