Event: Btdr (Btdr.US) released its first-quarter report for the fiscal year 2025. The company achieved a revenue of $70.1 million in the first quarter, a year-on-year decrease of 41.3%, but a quarter-on-quarter increase of 1.6%. Of this, self-operated business revenue was $37.2 million, a year-on-year decrease of 10.4%; the comprehensive gross profit was negative $3.2 million, with a gross profit margin of -4.6%, mainly due to rising electricity prices caused by the dry season in Bhutan, leading to a temporary shutdown of the Bhutan mining farm. However, after entering the wet season in the second quarter, electricity prices have returned to $0.042/kWh. Seal mining machine sales stood at $4.1 million, marking the official start of the company's mining machine sales. The adjusted EBITDA was negative $56.1 million, compared to a positive $27.3 million in the same period in 2024. The net profit was $410 million, primarily due to the fair value reversal of convertible notes ($448.7 million) and Tether options ($58.4 million) accrued in the fourth quarter of 2024.
Comments:
1. Prepaid accounts for Little Deer are expected to rise further to $382 million in the first quarter of 2025 (compared to $310 million in the fourth quarter of 2024), and the total amount required for the maximum obtainable wafer volume has been fully covered. The Seal02 mining machine has entered the shipping stage, and the subsequent rhythm of self-operation and sales will depend on competitors' pricing strategies. If competition is intense, priority will be given to lighting up the self-operated mining farm; the Seal03 mining machine completed wafer production in the first quarter and is currently still in the testing phase, with expectations to officially enter the layout and sales phase for the self-operated mining farm by the end of the third quarter and the fourth quarter of 2025.
2. Regarding the U.S. tariff war, Little Deer will complete the construction of the North American assembly plant in the second quarter, after which sales in North America will come from localized assembly. Although costs will rise by nearly 10%, this is negligible compared to the current tariffs in Southeast Asia. The Southeast Asia assembly plant will meet the demands of mining farms in non-U.S. regions.
3. The global power infrastructure construction of Little Deer continues to progress rapidly, with global available power capacity expected to approach 1.6 GW by the end of the second quarter and reach 1.8 GW by the end of this year.
4. The Little Deer self-operated mining farm hash rate has reached 12.5 Eh/s by April, expected to rise to 40 Eh/s in October, and is anticipated to exceed 40 Eh/s by the end of 2025. The company's latest Seal01 and Seal02 mining machines were only launched in March for the self-operated mining farm, but overall mining costs are still at least 20% lower than peers (including Mara, CLSK, etc.). After fully replacing old mining machines, the cost advantage will become more apparent, and monthly output will show an exponential upward trend beginning in the second quarter.
Investment Recommendation: Bitcoin prices have recently returned to an upward trend, likely to break the previous historical high price of $109,000 per coin. Since the U.S.-China trade war, the dollar has come under pressure, and Bitcoin, as an alternative asset, is beginning to show its safe-haven properties similar to gold. The Federal Reserve has also recently started to adopt an 'average inflation' policy, with expectations to cut interest rates as early as June, raising the forecast for the year to three rate cuts (previously one), which all provide positive support for Bitcoin prices. After experiencing a transition period in operations in the fourth quarter of last year and the first quarter of this year, Btdr will usher in an important moment. The speed of mining machine R&D and the speed of lighting up self-operated mining farms will be important highlights in the coming quarters. The operating conditions in the first quarter of 2025 are expected to be the worst period in the next two years, marking a turning point in operations, and it remains the best choice for North American Bitcoin mining stocks.
Investment Risks: Risks of further adjustment in Bitcoin prices, risks of TSMC wafer shipments not meeting expectations, and risks of the company's self-operated mining machines being launched slower than expected.