LM Funding America(LMFA) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q1 2025, the company mined 24.3 Bitcoins, a 12% increase sequentially, with Bitcoin mining revenue of approximately $2.3 million, reflecting a 25$5.4 million, with a core EBITDA loss of $2.8 million, influenced by a non-cash write-down of$1.8 million for Bitcoin held [12] Business Line Data and Key Metrics Changes - The company has transitioned to a vertically integrated operator in Bitcoin mining, improving margins and reducing operational risks [4] - The operational efficiency was maximized, achieving 560 petahash at the end of March 2025 [6] - The company generated approximately $150,000 from power sales back to the grid, contributing to improved mining margins [11] Market Data and Key Metrics Changes - As of April 30, the company held 148.7 Bitcoins valued at approximately$15.5 million, equating to about $3.1 per share, while the stock traded at$1.87 [5][12] - The market price of Bitcoin recovered to approximately $104,000 as of May 13, 2025, reversing the earlier write-down [12] Company Strategy and Development Direction - The company is focusing on immersion mining technology, which is expected to enhance operational efficiency and open new mining site opportunities [14] - The strategy includes treating Bitcoin mining sites as power producers, allowing for energy sales back to the grid, thus providing a hedge against Bitcoin price volatility [15] - The company remains committed to a long-term Bitcoin accumulation strategy, indicating plans to potentially add Bitcoin to its balance sheet through debt or equity [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the upcoming immersion mining expansion in Oklahoma, anticipating immediate returns and unique site selection opportunities [14] - The company aims to build a sustainable business model that can thrive under various market conditions, emphasizing flexibility and lower costs in Bitcoin mining [15] - The management remains bullish on Bitcoin, reinforcing their commitment to long-term value creation for shareholders [17] Other Important Information - The company has begun relocating 800 machines to its wholly owned Oklahoma site to reduce power costs and enhance mining efficiency [9] - The transition to a leaner operational model has resulted in a 7.7% reduction in staff costs and other expenses year-over-year [11] Q&A Session Summary Question: Can you discuss the Oklahoma site build-out and current thoughts on Texas? - Management indicated that there are no immediate plans for Texas due to counterparty issues, while the Oklahoma site is operational and expanding as planned [19] Question: Does the recent sale of S21 machines address all inventory issues? - Management clarified that the sale of S21 machines was part of their strategy, and they are managing inventory effectively [22] Question: What geographies are being targeted for new sites? - Management mentioned that they are exploring opportunities in Oklahoma and Pennsylvania, with potential offerings in Texas as well [26][27]