BitFuFu (NASDAQ: FUFU), a digital asset mining company based in Singapore, has reported a remarkable 69.7% year-over-year revenue growth in its second-quarter earnings. This achievement underscores the company's sustainable business model, which performs well in both bullish and bearish market conditions. BitFuFu forecasts continued growth in the second half of 2024, driven by its flexible approach to managing computing power and market volatility.
Leo Lu, BitFuFu’s Chairman and Chief Executive Officer, emphasized the company's strategic adaptability during the earnings conference call. “Our business model’s inherent flexibility – whether by increasing or reducing purchases of computing power, matching short-term and long-term procurements, or optimizing the mix between cloud-mining and self-mining computing power – enables us to sustain growth and profitability in a complex and volatile market environment,” Lu stated. BitFuFu reported total revenue of $273.8 million for the first half of 2024, nearly matching its full-year revenue for 2023, with a combined Q1 and Q2 adjusted EBITDA reaching $58.2 million.
In the second quarter, BitFuFu posted revenue of $129.4 million, up almost 69.7% year-over-year. The growth was driven by strength in both its cloud-mining and self-mining operations. Cloud-mining revenue increased by 66.8%, with registered users rising by 86.8% to over 395,000. Meanwhile, self-mining operations saw an 81.0% increase in revenue to $51.1 million.
Recurring revenue from active customers accounted for $47.4 million, or approximately 61.5% of cloud-mining revenue, while new customers contributed $29.6 million, highlighting the effectiveness of BitFuFu’s marketing and customer acquisition efforts. Sales and marketing expenses as a percentage of cloud-mining revenue remained stable at 0.8%, demonstrating the company's efficiency in scaling and user acquisition.
BitFuFu’s competitive advantage lies in its unique strategy of dynamically allocating hash rate between cloud-mining and self-mining, unlike its peers such as Bitfarms Ltd. (NASDAQ: BITF) and Riot Platforms Inc. (NASDAQ: RIOT), which focus primarily on self-mining. This approach allows BitFuFu to generate upfront capital, scale operations, and hedge against Bitcoin price volatility by pre-selling hash rate at fixed prices. By securing future revenue regardless of market conditions, BitFuFu ensures resilience and profitability.
This strong growth is encouraging, especially considering the April Bitcoin halving, which cut miners’ rewards by half, and a recent decline in Bitcoin prices. Lu highlighted steps the company is taking to cut costs and improve profit margins if Bitcoin prices remain low. BitFuFu has applied technology to overclock the hashrate of its ASIC mining machines, increasing computing power by 10% to 30% over the theoretical mining capacity. The company's in-house mining facility management system has also enhanced the efficiency of its mining machines.
BitFuFu is actively acquiring mining facilities globally that offer lower electricity costs and is confident of announcing new acquisitions soon. The company is strategically positioning itself for future growth when Bitcoin prices rise again and remains confident in the long-term potential of Bitcoin, noting that Bitcoin’s price is up more than 40% year-to-date, outperforming the S&P 500.
Looking forward, BitFuFu is building new revenue streams and growth opportunities. The mining facility management system, for example, has the potential to be monetized by offering it as a service to other miners. Additionally, BitFuFu is exploring synergies between mining and AI/HPC (High-Performance Computing) data centers, which could further diversify its revenue streams and reduce the impact of Bitcoin price volatility.
“BitFuFu had a strong second quarter and is well positioned for continued growth in the second half of 2024,” said Lu. “We remain focused on our strategy to increase our mining capacity while also improving fleet efficiency to grow revenue and profitability and drive long-term shareholder value.”
