This is the first article in a two part series comparing the Q3 2022 performance numbers of Bitfarms (BITF), Hive Blockchain (HIVE), Hut 8 (HUT), Marathon Digital (MARA) and Riot Blockchain (RIOT).

Read: Ranking the top five Bitcoin miners: Part II

Bitcoin miners released their quarterly three (Q3) report figures last month, providing facts and figures for what was a difficult mining period.

The moderate gain in Bitcoin price–about 3%–could not overcome the 6.3% increase in Bitcoin mining difficulty and associated drop in hashprice. A large part of losses were attributed to significant impairment charges, be it equipment, digital currencies, goodwill, or even loans with third parties. Depreciation and stock compensation are also non-cash charges that have affected the bottom line.

In this two part article, we’ll take a look at the top five miners my exehash including Bitfarms (BITF), Hive Blockchain (HIVE), Hut 8 (HUT), Marathon Digital (MARA) and Riot Blockchain (RIOT). The first article will start with a review of each miner’s Q3 reports, with the second article delving into notable metrics.

(To present their data in a better light the Bitcoin miners use non-GAAP financial measures, namely Gross Mining Profit and Adjusted EBITDA which both eliminate the effects of certain non-cash and / or non-recurring items that do not fully reflect ongoing strategic business operations).

Bitfarms (BITF)

Bitfarms recorded a net loss over the period totalling $84.8 million, largely due to a total impairment charge of $79.4 million relating to its Argentinian cash generating unit (CGU) in addition to depreciation and amortization costs of $20.7 million.

The company had a great quarter in terms of self-mining production, delivering 1,515 Bitcoin for at an average of 16.5 per day and generating $33.2 million in revenues. Bitfarms hashrate increased from 3.6 EH/s to 4.2 EH/s, or 17%, as also reflected in an increase in power under management of 21% from 137 megawatts (MW) to 166 MW.  However, with the current level of Bitcoin and the uncertainty with regards to the Argentinian macroeconomic environment the company has decided to modify their corporate hashrate guidance from 6.0 EH/s to 5.0 EH/s to reflect the impact of on the timing of importing miners.

As noted in August, Bitfarms had a troubling high level of debt totalling close to $100 million. To alleviate some of the financial pressure, Bitfarms has since sold 2,595 BTC for proceeds of $56 million, using some of this to repay Galaxy Digital (GLXY) $15 million of its Bitcoin backed loan facility and lowering the annual interest expense by $2 million. Some $23 million remains of the facility.

Bitfarms paid an additional $6.7 million off their Bitcoin backed loan facility during November, bringing the outstanding principal to $16.5 million. Lastly, the company managed to reduce their General and Administration (G&A) costs by 15% compared to the previous quarter.

Hive Blockchain (HIVE)

Hive Blockchain recorded a net loss of $37.7 million during Q3, predominantly due to depreciation charges of $24.3 million and the impairment of mining equipment for $26.2 million.  The Adjusted EBITDA is perhaps more instructful, however, showing a positive $18.8 million.

The company mined 858 Bitcoin and 7,309 Ethereum, achieving a revenue of $29.6 million during the quarter. Ethereum mining ceased on September 15 following ‘The Merge’ and the company has subsequently sold their Ethereum Hodl to reinvest in new ASIC mining equipment.  Since this date Hive Blockchain has been utilizing its GPU fleet to mine an assortment of coins based on its optimization algorithm, thereby achieving significantly more revenues than mining a single coin, for example Ethereum Classic. These technical advancements provide the company with a competitive edge in generating revenue from GPU operations.

Hut 8 (HUT)

Hut 8 took a net loss of $17.2 million, predominantly due to depreciation charges of $18.3 million. The company mined 982 Bitcoin in Q3 2022, an 8.5% increase compared to Q3 2021. In dollar terms, Hut 8 earned $12.4 million less than the same period last year, from $36.4 million to $23 million. The company’s investment in newly acquired high performance computing operations added $3.2 million of revenue during the quarter.

The Canadian Bitcoin miner has been fairly conservative with growth during 2022, but achieved a 10% growth in hash rate during the reporting period and have prudently revised a number of growth forecasts, now aiming for an operational hashrate target of 3.5 EH/s by end of year.

In the last few weeks Hut 8 have requested mediation proceedings to be commenced with Validus Power Corp, who supply energy to the company’s mining facility in North Bay, Ontario.  The company is also exploring alternatives, to mitigate the impact of this dispute.

Riot Blockchain (RIOT)

Although suffering a net loss of $36.6 million–with depreciation accounting for $26.6–Riot Blockchain had a good quarter, hitting $46.3 million in revenues, for self mining, hosting and engineering. Of this total revenue, the company achieved $22.1 million for self-mining and produced 1,042 Bitcoin during the reporting period.

In comparison to Bitfarms and Hive Blockchain Bitcoin production, this initially appears low, especially when you consider the company was achieving an operational hash rate of 5.6 EH/s by the end of the reporting period.  However, being located in Texas, the company was a participant in the ERCOT 4 Critical Peaks (4CP) program, which effectively means the less load contribution you use during peak usage periods, between June and September, the more you save in the preceding year.  When you look at the amount of power generated at the Whinstone facility this is a significant saving.

A further benefit available to Riot Blockchain was the selling of blocks of energy back to the grid, for which it receives a credit the following month. The company earned $13.1 million in power curtailment credits for the three-month period ended September 30, 2022, equivalent to approximately 760 Bitcoin when calculated using average daily closing Bitcoin prices on a monthly basis.

With total operational capacity getting closer to 700 MW at the Whinstone site, Riot Blockchain broke ground on their next facility, a short distance away at their Corsicana site in Navarro County. Shareholders recently supported the company’s plans to issue additional share capital to meet the financial obligations surrounding the1 GW facility.

Marathon Digital (MARA)

Marathon Digital’s misses in Q3 2022 was not totally unexpected, given the issues of numerous hosting complications such as with Compute North or its former Hardin, Montana facility.

The firm took a net loss of $75.4 million. Even after removing the one off non-cash and non-recurring items, Marathon’s Adjusted EBITDA was -$8.7 million. In simple terms, the Las Vegas-based firm was not able to produce a positive cash generation.

Read: Falling Bitcoin price, debt obligations loom for Marathon Digital