Bitdeer Technologies Group (NASDAQ: BTDR), a prominent player in the Bitcoin mining industry, has announced a significant net loss of $50.1 million for the third quarter of 2024. This financial setback is attributed to several factors, including the recent Bitcoin halving, increased global hash rates, reduced hosting income, and rising research and development costs associated with the development of its SEAL02 chip.
In its unaudited financial results released on November 18, 2024, Bitdeer reported a decline in total revenue from $87.3 million in Q3 2023 to $62 million in Q3 2024. This represents a substantial drop of approximately 29% year-over-year. The company’s cost of revenue also decreased, falling from $66.2 million to $59.2 million, leading to a gross profit of just $2.8 million, compared to $21.1 million in the same quarter last year.
The drastic net loss reflects not only operational challenges but also significant non-cash expenses related to fair value changes of derivative liabilities, which amounted to $14.7 million during the quarter. The adjusted EBITDA was reported at negative $8.5 million, down from positive $28 million in Q3 2023.
The recent Bitcoin halving event, which occurred in April 2024, has had profound implications for mining profitability. The halving reduced the reward for mining new blocks from 6.25 BTC to 3.125 BTC, directly impacting miners’ revenue streams amid rising operational costs and increased competition due to higher global hash rates.
Bitdeer’s self-mining revenue did see a slight increase from $30.1 million to $31.5 million, primarily due to a year-over-year increase in average self-mining hashrate by 27.9% to 7.8 EH/s. However, this was offset by declines in cloud hash rate revenue, which dropped from $15.6 million to $7.1 million, and general hosting revenue that fell from $22.2 million to $9.6 million.
The company’s research and development expenses surged significantly from $8.5 million in Q3 2023 to $24.8 million in Q3 2024, largely due to a one-time incremental development expense of approximately $13.4 million related to the SEAL02 chip project. This investment reflects Bitdeer’s commitment to advancing its technology and maintaining competitiveness in an evolving market.
Despite the reported losses, Bitdeer’s cash reserves increased substantially from $203.9 million at the end of Q2 2024 to $291.3 million by September 30, 2024. This increase indicates that the company is well-positioned financially to navigate current market challenges and invest in future growth opportunities.
Management expressed optimism about ongoing technological advancements and strategic initiatives aimed at improving operational efficiency and profitability moving forward.
