CleanSpark posts $29.3 million net loss and will exit the energy business

Bitcoin miner CleanSpark posted a net loss of $29.3 million in the third quarter of its fiscal year ending in June, compared with a net loss $170,000 in the previous quarter.

The company is exiting energy business and is becoming "a pure play bitcoin miner," it said in its earnings report on Tuesday.

Mining represents 90% of the CleanSpark's revenue. It was, however, "spending a disproportionate time and working capital focused on a segment that provided 10% of revenue and resulted in negative cashflow," said CEO Zach Bradford. He also said that the company was still "pursuing the sale" and has not executed a final agreement.

In connection with the reclassification of its energy business as discontinued operations, CleanSpark recorded an impairment charge of $10.6 million.

CleanSpark had its most productive quarter yet in terms of bitcoin mined (964 BTC, a 7% increase over the previous quarter), but that was offset by the decline in bitcoin's value. The company brought in $31 million in revenue in the most recent quarter, down from $41.6 million in the previous quarter.

CleanSpark announced earlier today that it acquired a 36-megawatt mining facility in Georgia from vertically integrated bitcoin miner Waha Technologies for $16.2 million. The new site will add 1.1 exahash per second (EH/s) to the company's hash rate (a 38% increase) is set to grown up to 86 megawatts in 2023.

"We are optimizing uptime and maximizing profits with our wholly owned locations," CEO Zach Bradford said. "We have also made efficient use of our capital by putting new miner purchases to work quickly. Despite macroeconomic headwinds, our results demonstrate the resiliency of our strategy, and we expect to grow in what is otherwise a bear market."

CleanSpark announced the purchase of 2,861 mining rigs between June and July, leveraging favorable market conditions to secure a better deal. Last month it acquired 1,061 Whatsminer M30S machines, increasing its total hash rate by 93 petahashes per second (PH/s).

Bradford said that CleanSpark's hybrid approach of co-locating its machines while expanding its own infrastructure has put the company in an "excellent position" to grow "in what is shaping up to be an incredible market for builders."

As of July 31, CleanSpark had 30,450 miners in its fleet with a total hash rate of 2.9 EH/s. It also had 519 BTC in its reserves by the end of the month.

This story has been updated with company comments after the earnings call.