Benzinga - Recent announcements of the significant increase in megawatt capacity and bitcoin production by Mawson Infrastructure Group Inc. (NASDAQ: MIGI) seem to have positioned the company to become a noteworthy player in the bitcoin mining industry. This projected growth has the potential to have Mawson become more broadly known among investors thanks to its innovative approach to sustainable energy infrastructure and on-demand deployment of infrastructure assets to increase revenues.
For some time now, Mawson has pivoted to focus all its operations in the U.S. to take advantage of the financial flexibility offered by its Energy Markets programs. Given the volatility of energy markets across the U.S., monetizing distributed energy resources is often a highly profitable way for companies like Mawson to generate revenue and reduce costs.
The Energy Markets program involves actively engaging in energy demand response programs at Mawson's operations. Essentially, demand response programs involve reducing energy consumption during peak times in the market when energy prices are high to save costs for both the company and the energy grid. In return, Mawson receives financial incentives for participating in these programs.
Mawson reports that its substantial secured infrastructure pipeline, including energy capacity available for Bitcoin mining, modular data centers, and transformers, continues to be deployed at pace – allowing the company to make the most of the Energy Markets programs.
Starting in June last year, for example, the company actively engaged in energy demand response programs at its operations in response to volatile energy markets. These programs contributed to the generation of $13.7 million in revenue–with a very high-profit margin– in 2022.
When Bitcoin prices were under pressure and were low in the latter part of last year, Mawson shut down its machines to sell power back to the grid. With Bitcoin prices up over 70% since the December 2022 lows, the company’s Bitcoin production has the potential to show healthy month-to-month Bitcoin production numbers as more machines go online.
Higher Bitcoin prices could come with a significant increase in revenue and a rise in production, especially as Mawson says it will continue to diversify its revenue through self-mining and host mining.
Relocating 5,376 ASIC Miners To Pennsylvania Sites
In achieving its plans to move its operations to the U.S., the company revealed on February 23 that it had closed its facility in Condong, Australia, and is transferring all its equipment to Pennsylvania. All equipment, which includes 5,376 ASIC miners and eight new generation Modular Data Centers (MDCs) capable of holding 672 ASIC miners each, or 5,376 ASIC miners in total, is expected to be deployed in Q2.Mawson says it is concentrating all current efforts on the 120-megawatt (MW) Sharon, PA facility, and the 100-MW Midland, PA facility. The 100 MW Midland facility will come online in this quarter–, Second Quarter,2023. And the first 12 MW of the 120 MW Sharon facility will also come online in early Q2, 2023.
The company expects to have 112 MW online in early Q2, 2023 representing enough power for up to 33,000 ASIC miners operating at approximately 3.6 exahashes per second (EH/second). This capacity expansion could generate up to about 14.5 BTC per day — translating into roughly $132 million in revenue per year — at the current Bitcoin price of approximately $28,000.
Mawson Expands Midland Facility To 120 MW
On March 02, Mawson announced it had signed a lease amendment for its facility in Midland, PA, which will allow for an additional 20 MW of power capacity. The site will have 120 MW of capacity upon completion of development works. Again, this site is expected to be 100% online in early Q2 2023.Mawson is deploying an additional 10 Modular Data Centers and 5,880 ASIC miners needed to fill the capacity. All of the company’s mining units are fully funded and currently being installed at the Midland, PA facility.
Mawson is developing another 120 MW facility in Sharon, PA, which is expected to come online incrementally through 2023 and 2024. Combined, the two sites will have 240 MW available (once fully developed), which can house up to 70,560 miners, which can produce up to 7.8 EH/s or approximately 31.4 BTC/day — about $287 million in revenue per year (at a $28,000 Bitcoin price).
Mawson expects to have 132 MW online in early Q2, 2023 representing enough power for up to 38,808 ASIC miners operating at approximately 4.2 EH/second2. This capacity expansion could potentially generate up to about 16.9 BTC per day — approximately $154 million in revenue per year.
Notable Financial Q4 2022 Performance
Mawson recently reported its Q4 2022 financial results showcasing record revenue of $84.3 million, a massive 92% increase compared to the previous year. The gross profit stood at $36.6 million, an 8% increase compared to the previous year, while Non-GAAP earnings before interest, taxes, depreciation and amortization (EBITDA) stood at $30.4 million, up 70% year-on-year.Mawson’s financial performance was driven by its energy markets programs and a focus on selling, acquiring and managing critical infrastructure assets that generate stable, long-term cash flows. The energy markets program and strategic acquisitions helped expand the company’s footprint and diversify its portfolio of assets, ultimately resulting in stronger financial performance.
The company’s Q4 2022 earnings call highlighted that Mawson’s focus remains on deploying capital towards high-quality infrastructure assets, with the management team remaining optimistic about the company’s growth potential while actively pursuing new opportunities in the infrastructure space and enhancing its diversified and highly flexible operating model.
Highlights Of Q4 2022 Financial Performance
- Mawson has generated record year-to-date revenue of $84.3 million, up 92% year-on-year.
- Gross profit of $36.6 million, up 8% year-on-year.
- Non-GAAP earnings before interest, taxes, depreciation and amortization (EBITDA) of $30.4 million, up 70% year-on-year.
- Bitcoin produced for self-mining increased 66% to 1,343 coins.
- Almost no tax burden in the EBITDA number.
- Hosting colocation business also generated solid growth, rising 1,464% from 2021 to $13.3 million in 2023.
- Mawson had a new source of revenue in 2023 – the Energy Markets program – which generated $13.7 million in revenue at a gross margin of 91%.
- Mawson received $20.6 million of proceeds from the sale of the Georgia facility in Q4, with additional share-based payments hitting the balance sheet subsequent to year-end. (More detail to explain the $40 million total proceeds)
With this expected increase in capacity and Bitcoin production, Mawson seems like a currently under-known Bitcoin miner that could potentially even become a favorite among investors in the Bitcoin mining space as the month-to-month Bitcoin numbers are released going forward.
Featured Photo by www.mawsoninc.com
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