Summary BitFuFu delivered exceptional FY24 growth, with revenue surging 63.1% to $463.3 million and net income skyrocketing 414.3% to $54 million, driven by cloud mining expansion and efficiency gains. The company is aggressively scaling operations, targeting 650-800MW hosting and 33 EH/s mining capacity by FY25, supported by recent low-cost power acquisitions, including a 51MW site at $0.03/kWh. A two-year framework agreement with BITMAIN for up to 80,000 next-gen miners ensures a steady hardware supply with flexible payment terms, reinforcing BitFuFu’s long-term scalability. While trading at a premium 16.86x EV/EBITDA, BitFuFu's expansion plans and potential entry into AI/HPC hosting position it for further growth, providing a fresh catalyst for valuation upside. BitFuFu ( FUFU ) has been the recent breakout miner and has shown impressive growth and expanding market presence. From being a recently listed mining stock, BitFuFu has so far cemented its place among established Bitcoin ( BTC-USD ) miners like Riot Platforms ( RIOT ), MARA Holdings ( MARA ), CleanSpark ( CLSK ), and Hut 8 ( HUT ). I'll be doing a peer metric comparison between FUFU and these peers later in this article. BitFuFu is a Bitcoin mining and cloud computing company that was created from an early incubation of the cloud mining division at Bitcoin mining hardware manufacturer BITMAIN. BitFuFu's flagship offering - cloud mining platform - is a Bitcoin mining model where users can purchase mining power without needing to own or maintain physical mining rigs. The company's board comprises several former BITMAIN employees and c-suite execs. Their wealth of experience seems to have paid off so far, as BitFuFu has gained solid ground among Bitcoin miners in a short time. These days, in every mining performance metric, BitFuFu has strong figures and stacks up competitively against its peers. Earlier this month, BitFuFu was included in the newly launched Bitwise Bitcoin Standard Corporations ETF ( OWNB ), an ETF that tracks publicly traded companies holding at least 1,000 BTC in their corporate treasuries. FUFU made the top 10 holdings of the ETF and had a 4.03% allocation at the ETF launch. Results are in for full-year 2024, and BitFuFu has shown exceptional financial and operational performance, with impressive revenue growth, expanding hashrate and power capacities, and better liquidity position. BitFuFu FY24 Operational and Financial Highlights For FY24. BitFuFu Increased its revenue by 63.1% YoY to $463.3 million, up from $284.1 million in 2023. Net Income surged by an impressive 414.3% to $54.0 million, compared to $10.5 million in FY23. And adjusted EBITDA grew by 181.8% to $117.5 million, reflecting enhanced operational efficiency. The company's cash position also increased by ~130% compared to FY23. BitFuFu now holds $175 million in cash and digital assets. Cloud mining remains the main revenue driver for the company's top line and was $271.5 million in FY24 - 58.5% of the total revenue generated in FY24. Self-mining contributed $157.5 million to total revenue in FY24, representing about 34.0% of the total revenue. Sales of mining equipment amounted to $30.5 million, making up 6.6% of total revenue. While hosting services and others amounted to $4.3 million, which is 0.9% of total revenue. On the cost front, the average cost to mine per BTC grew by 63% for BitFuFu, from ~$28,000 to ~$47,000, mainly due to the halving event of April 2024 and the increased Bitcoin mining difficulty. While SG&A costs jumped 583.8% YoY, due to the company incurring $17.6 million in share-based compensation expense as well as a $2.3 million increase in legal and consulting expenses. Cloud mining grew by almost 100% YoY, to 600,000 users. Operationally, BTC production was lower in both cloud mining and self-mining, due to last year's halving event and increased network difficulty. BitFuFu's Bitcoin stockpile, however, increased despite lower production. Miners have seen revenue stabilization post-halving. And in Q4 there was a rebound in miners' revenue, recovering from the drop seen in Q2 and Q3 last year. These factors contributed greatly to BitFuFu's stellar performance. Q4 was the inflection point of the 2024 fiscal year. Coin Metrics With FY25 having a more favorable outlook for miners, I believe BitFuFu would be able to sustain its financial growth this fiscal year. One of the latest developments for a positive outlook for miners in FY25 is the SEC clarifying that Bitcoin PoW mining and mining pools activities do not violate securities laws. And for BitFuFu, being heavily focused on cloud mining, this development is an important step towards validation of its business model and potentially creates a favorable market environment. moving forward. BitFuFu FY25 Outlook Looking ahead to 2025, we are well-positioned for another year or robust revenue growth. We expect our mining capacity to reach approximately 33 EH/s and hosting capacity to be in the range of 650MW to 800MW by year-end Leo Lu, CEO BitFuFu While the CEOs target and positive outlook to expand BitFuFu's mining and hosting capacity is a step in the right direction, the main takeaway for me in the earnings calls was the strategies the company is implementing to achieve economies of scale across the board and to lower operational cost as well as the average cost to mine per BTC. These strategies include acquisitions of power capacity and relocation of leased and self-owned mining machines from higher-cost facilities to lower-cost facilities. The relocation strategies have begun yielding results so far. In Q4, BitFuFu achieved a 25% reduction in average hosting costs due to the relocation strategies and acquisition of 164 MW capacity. The acquisition and relocation strategies have continued to progress well into FY25. Last month, BitFuFu acquired a majority stake in a 51 MW operational Bitcoin mining data center in Oklahoma, which offers competitive electricity costs averaging $0.03 per kWh. The miner also plans to deploy AntMiner S21 miners, which run at an efficiency of ~$16 J/T, at this facility. The last two power capacity acquisitions, 164 MW in Q4 last year and 51 MW so far this year, I believe BitFuFu's goal of reaching the target 650MW - 800MW power capacity by the end of FY25 is feasible. With the current cash and cash equivalent and BTC stash amounting to $175 million of liquid assets, I also think BitFuFu has a clearer path toward adding its targeted 1GW of incremental capacity by the end of 2026. There is also a two-year framework agreement with BITMAIN for up to 80,000 S-series miners (signed in January this year), including the S21 XP and S21 Pro models. The mining machines will be used for self-mining as well as for BitFuFu's other mining models, like cloud mining, and hosting services. The purchase terms with BITMAIN are flexible and will depend on market conditions and BitFuFu's ongoing capacity needs. The agreement also includes flexible payment terms, which allows BitFuFu to pay part of the purchase price in shares or defer some cash payments interest-free after delivery. The long-standing relationship with BITMAIN is an edge in securing cutting-edge mining hardware at scale and helps BitFuFu maintain competitiveness among peers, and this also means the path to achieving the 33 EH/s capacity target for FY25 is pretty clear. Data by YCharts Though some miners have turned profitable, I'd still lean towards EBITDA for peer valuation comparison. These mining stocks are too influenced by Bitcoin volatility to rely on forward P/Es. BitFuFu currently trades at a premium relative to its EBITDA compared to mining peers, as reflected in its higher EV/EBITDA multiple (shown in the above chart). FUFU jumped about 22% on yesterday's earnings release. FUFU now trades at 16.86x EV/EBITDA. The market seems to be pricing in stronger growth and expansion prospects for BitFuFu. Without a doubt, BitFuFu has clear visibility on scaling operations and fresh expansion opportunities ahead. The company has not even implemented HPC yet, and that has been mentioned as a potential future revenue stream, which is a fresh catalyst for future valuation upside. With the recent power capacity acquisitions mentioned earlier and the agreement with BITMAIN for 80,000 next-gen miners over the span of two years, BitFuFu has clear visibility towards achieving their mining capacity target and power capacity target. This clear scalability potential is what I think the market is pricing. Risks Ambitious expansion targets lead to higher spending. We can see how SG&A expenses jumped in FY24 due to share-based compensation. Not ruling out additional future share-based compensation as BitFuFu's relocation and expansion strategy will most likely be needing specialized high-cost talent. This has the potential to be dilutive. Also, if BitFuFu pays part of its BITMAIN miner agreement in shares, it could also be dilutive to shareholders. Takeaway BitFuFu's premium valuation relative to peers, shown in its higher EV/EBITDA and P/E multiples, shows that the market is pricing in strong growth prospects and a clear path to expansion. The company's recent power capacity acquisitions, its agreement with BITMAIN for up to 80,000 miners, and its liquid assets of $175 million provide clear visibility toward achieving its mining capacity targets. Also, BitFuFu is yet to enter the HPC and AI hosting space officially, which several peers have already implemented and are recording sales from. This presents a fresh growth catalyst for FUFU that could further support the valuation premium. However, ambitious expansion plans come with higher spending, and with share-based compensation and the potential for share payments under the BITMAIN agreement, investors should keep an eye on the structure of these share issuances.
