Bitfarms (BITF.TO), a global vertically integrated Bitcoin data center company, reported a wider quarterly loss for the third quarter on Wednesday, despite revenue growth, as it noted a "significant shift" in its portfolio towards the United States.

Bitfarms posted a net loss of US$0.08 per share for Q3 2024, widening from a net loss of $0.06 per share in the same period last year. Analysts polled by Capital IQ expected a loss of $0.10.

CFO Jeff Lucas in a statement cited third quarter headwinds of record low hashprices for the Bitcoin mining industry, a 62% year-over-year increase in network difficulty, and the first full quarter following the April Halving Event.

Revenue for Q3 was near $45 million, marking an 8% sequential increase and a 30% year-over-year increase from $34.6 million in Q3 2023. Analysts polled by Capital IQ expected $46.6 million.

Among highlights, Bitfarms cited gross mining margin of 38%, compared to 51% in Q2 2024 and 44% in Q3 2023; a current hashrate of 11.9 EH/s (exahashes per second), up from 10.4 EH/s in Q2 2024; and current efficiency of 21 w/TH, a 16% improvement from June 30, 2024.

CFO Lucas said while Bitfarms achieved its year end efficiency target of 21 w/TH in the third quarter, shipping delays and continued miner servicing of its Bitmain T21s impacted ability to reach 21 EH/s in 2024. He added the company is working closely with Bitmain on warranty servicing and miner upgrades and expects to reach 21 EH/s in the first half of 2025.

Bitfarms added that synthetic HODL increased to 802 at October 31, 2024 from 208 long-dated BTC call options at June 30, 2024, up 286%.

During the quarter, Bitfarms announced its acquisition of Stronghold Digital Mining, Inc. (Nasdaq: SDIG), which is expected to put it "on track" to increase its energy portfolio to over 950 MW by year end 2025 with potential for multi-year expansion capacity of up to 1.6 GW. This represents a significant shift of Bitfarms' portfolio towards the U.S., which will come to represent approximately 66% of the Ccmpany's total portfolio, an 11-fold increase from 6% operating power in the U.S. today. Bitfarms said it has already begun maximizing the utility of the Stronghold sites with two consecutive hosting agreements totaling 20,000 miners, signed in September and October, supporting approximately 4 EH/s. Upon close of the Stronghold acquisition, these hosting agreements will revert to self-mining operations.

The company said continues to make progress on its fleet upgrade program, deploying 5,400 additional miners during the quarter and achieving its efficiency target of 21 w/TH three months ahead of schedule. This efficiency represents a 40% improvement year-to-date, reducing direct operating costs per terahash and improving gross margins.

In addition, Bitfarms will be upgrading the remaining 18,853 T21 miners to be delivered by Bitmain as part of Bitfarms' fleet upgrade program announced last year. Under the agreement, Bitfarms will be installing more powerful and efficient S21 Pro miners, operating at 234 TH/s and 15 w/TH, which represents more than a 20% improvement from the T21 miners in both energy efficiency and hashrate.

"As previously communicated, 2024 has been a transformative year for Bitfarms," said CEO Ben Gagnon. "Year to date, we've refreshed nearly our entire fleet of miners, significantly improving our mining economics, acquired one new site and entered agreements to acquire two additional new sites in the U.S., and completely revamped our operational and Board structure, strengthening our leadership and corporate governance. We are now uniquely positioned with a strategic pipeline of over 950 MW in 2025 with nearly half a gigawatt of power infrastructure unallocated with miners. This represents a massive, secured, and cost-effective near-term growth opportunity with the flexibility necessary to maximize shareholder value as we approach the anticipated 2025 Bitcoin bull cycle."