Bitfarms miner shares surged by 22% after the release of its Q2 report

What’s new? Shares of Canadian miner Bitfarms (BITF), which is facing a takeover attempt by US competitor Riot, rose sharply in price after the publication of its Q2 financial report. Thus, Bitfarms reported a net loss of $27 million or $0,07 per basic and diluted share, well below the $0,11 loss per share predicted by MarketWatch analysts. This makes the result comparable to a $6 million loss a year ago.

Material by The Block

What else is known? For comparison, Riot, which is in fifth place by capitalization among miners with the indicator of $2,5 billion, according to the results of the second quarter for the first time since 2022 recorded a loss, amounted to $84,4 million.

Bitfarms revenue decreased by 16% compared to Q1 and amounted to $42 million. The main reason was a halving in the bitcoin network, which occurs every four years and halves the reward for mining blocks. The fourth halving occurred on April 19 and cut the reward to 3,125 BTC.

The company also reported a $24 million operating loss (the same as the same period last year), which included $46 million in accelerated depreciation of old rigs to mine the asset.

In the reporting period, Bitfarms mined 614 bitcoins at an average direct production cost of $30 600 per coin. A year ago, the figure was $18 400. During the quarter, the average daily mining volume amounted to 6,7 BTC. From Q1 to Q2, the company’s hashrate increased from 6,5 to 11,1 EH/s.

Ben Gagnon, who took over as Bitfarms CEO last month, noted that the company continued to expand and diversify its business by entering into agreements for new sites. The latest data center in Sharon, Pennsylvania, represents Bitfarms’ first step in growing in the region. It is run by energy company PJM Interconnection, which is the most attractive energy market in the United States.

According to Gagnon, this will allow Bitfarms to achieve a hashrate of 35 EH/s in 2025, 67% above its year-end target of 21 EH/s.

Bitfarms raised $136 million in net proceeds in the second quarter and $240 million through August 7 in a follow-on equity offering.

The miner also added 111 BTC to its coffers in July, bringing the total number of coins to 1016 BTC.

The company’s shares are trading at $2,31 on the Nasdaq, having added 22% overnight. Bitfarms is the 11th most capitalized mining company on the list at $1,03 billion.

Earlier, Bitfarms, in an attempt to resist a takeover by Riot, announced the issuance of new shares at a reduced price to existing shareholders in a “poison pill” method to reduce the competitor’s stake. However, following Riot’s complaint, an Ontario court ordered Bitfarms to curtail the initiative.

Unlike Bitfarms, larger miners, including Riot, reported significant losses at the end of Q2. For example, Core Scientific, which is the fourth-largest miner by capitalization at $2,56 billion, reported a loss of $805 million. Leading miner Marathon Digital, with a capitalization of $5,05 billion, reported a loss of $199,7 million.