In This Article:
Release Date: March 04, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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DMG Blockchain Solutions Inc (DMGGF) has completed regulatory approvals to become a qualified digital asset custodian, making it one of only three in Canada.
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The company is focused on customer acquisition for its Systemic Trust and aims to onboard its first customers by the June quarter, with a significant revenue ramp-up by the end of the year.
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DMG's core plus strategy aims to monetize a carbon-neutral Bitcoin ecosystem, with partnerships and customer acquisition as key focuses.
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The company has achieved a realized hash rate of 1.62 X a hash, up 65% sequentially, and plans to reach 2.1 X a hash with improved fleet efficiency.
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DMG's cash plus Bitcoin balance increased 62% sequentially to $58.2 million, showcasing strong financial growth.
Negative Points
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The company faces uncertainties regarding the future profitability of Bitcoin mining, leading to cautious capital deployment.
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DMG's hosting revenue decreased 25% sequentially, and the company expects hosting revenue to decline to near zero as existing customers retire their fleets.
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Operating and maintenance costs increased 44% due to a 65% increase in hash rate, impacting overall profitability.
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The company is evaluating the cost of energy at a new data center site, which has been significantly higher than expected, affecting project viability.
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DMG's stock has been under pressure despite achieving milestones, reflecting broader sector challenges and market uncertainties.
Q & A Highlights
Q: How will the recent 25% tariff from the US impact DMG Blockchain Solutions? A: Sheldon Bennett, CEO, stated that the impact is uncertain as DMG does not heavily rely on US-sourced goods or services. The tariffs might delay plans for US market entry, but it's too early to determine any material impact on the business.
Q: What is the timeline for the AI joint venture with the Malahat Nation to build the 2,150 megawatt sites? A: Sheldon Bennett, CEO, explained that building a new facility on DMG's property could take 1.5 to 2 years, and longer on the Malahat property due to the need for a substation and securing approvals. The acquisition of a 10 megawatt prefabricated data center could accelerate initial deployment.
Q: What is the expected revenue impact of the prefabricated data centers? A: Sheldon Bennett, CEO, mentioned that while it's early to speculate, the prefabricated data centers, being military-grade and SCIF-rated, could potentially generate revenues exceeding current Bitcoin mining revenues.