Shares of Bit Digital Inc. dropped nearly 8% on Monday after the company reported a larger-than-expected third-quarter loss, falling short of analyst projections. The company posted a net loss of $0.26 per share, significantly wider than the anticipated $0.03 per share, and higher than last year’s $0.08 loss. Revenue for the quarter came in at $22.7 million, narrowly missing the $22.91 million forecast but marking a 96% increase from $11.6 million a year ago. The growth was primarily driven by High-Performance Computing (HPC) services, which generated $12.2 million compared to no revenue in this segment last year.
Bitcoin mining revenues, however, declined 11% year-over-year to $10.1 million, reflecting a 59% drop in Bitcoin production due to reduced block rewards following the April halving and increased network difficulty. Despite these setbacks, Bit Digital managed a 104% boost in operational hash rate, which partially offset the production decline. The company ended September with 1,863 BTC, valued at $118 million at the time. With Bitcoin’s 37% rally since then, those holdings are now worth approximately $168 million, despite Bitcoin’s recent dip to $90,000 from its November 13 peak of $93,477.
Retail sentiment remained surprisingly bullish despite the earnings miss, with increased chatter on platforms like Stocktwits. Many investors suggested the poor performance was due to Bitcoin’s rally not being fully factored into the quarter’s results. The management reaffirmed its guidance for achieving $100 million in run-rate revenue from HPC services by the end of 2024, even as the stock remains up just 5% year-to-date, underperforming Bitcoin’s 112% gain and broader market indices.