CleanSpark, Inc. (CLSK) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary and Q&A indicate strong financial performance, strategic partnerships, and a focus on AI data centers, with stable cash flows and high margins expected. While Bitcoin mining presents risks, the company is transitioning to AI, a growing market. The sentiment is positive, with strategic expansions, partnerships, and a focus on tenant acquisition for AI campuses. Despite some uncertainties in the Q&A, the overall outlook is optimistic, suggesting a positive stock price movement.
Key Financial Performance
Revenue Generated more than $180 million in revenue at a gross margin exceeding 47% during the quarter. This represents a year-over-year increase of approximately $19 million or 12%. The increase was driven by relatively flat Bitcoin production but higher revenue per Bitcoin ($100,000 compared to $84,000 last year).
Gross Margins Gross margins declined from approximately 57% a year ago to 47% this quarter. The decline was mainly driven by the year-over-year increase in network difficulty.
Power Prices Power prices increased marginally to $0.056 per kilowatt hour, up from $0.049 a year ago. This reflects the decision to continue hashing to higher cost, higher revenue periods.
Net Loss Recognized a net loss of approximately $379 million compared to net income of approximately $247 million a year ago. This change was driven primarily by mark-to-market adjustments to Bitcoin's fair value.
Adjusted EBITDA Adjusted EBITDA was negative $295 million compared to positive $322 million a year ago. This was also driven primarily by mark-to-market adjustments.
Bitcoin Value Bitcoin value as of December 31 was $1.15 billion, down from $1.5 billion as of September 30. The difference is attributed to a noncash mark-to-market adjustment of $350 million.
Cash Balance Cash balance increased over $400 million compared to Q4, due to a $1.15 billion 0% convertible transaction closed in November. A portion of the proceeds was used to pay off Bitcoin-backed lines of credit and repurchase $463 million of stock.
Digital Asset Management (DAM) DAM generated over $13 million in premiums and cash during the quarter, representing about 24% of normalized adjusted EBITDA. This was achieved through strategies like covered call derivatives and basis trades, yielding an annualized return of 4.2% on Bitcoin holdings and over 5.5% on cash allocated to basis trades.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
AI monetization: CleanSpark is evolving into a digital infrastructure and data center development company, leveraging its Bitcoin mining operations to fund AI monetization. The company is in the second phase of AI development, focusing on tenant-driven technical and commercial alignment.
Bitcoin mining: Bitcoin mining remains foundational, generating over $180 million in revenue at a gross margin exceeding 47% during the quarter. The company operates a scaled mining footprint of more than 50 exahash per second.
AI infrastructure expansion: CleanSpark acquired 271 acres in Austin County, Texas, with 285 megawatts of contracted power, and initiated a second development in Brazoria County, Texas, with a 300-megawatt demand load expandable to 600 megawatts. These assets form a Houston area infrastructure hub with almost 900 megawatts of potential utility capacity.
Sandersville expansion: Acquired a 122-acre parcel near its substation and power infrastructure to strengthen its position in the AI market.
Digital Asset Management (DAM): Generated $13 million in premiums and cash during the quarter, representing 24% of normalized adjusted EBITDA. DAM strategies include covered call derivatives and basis trades, achieving an annualized return of 4.2% on Bitcoin holdings.
Revenue and margins: Revenue grew by $19 million year-over-year to $181 million, with gross margins at 47%. However, adjusted EBITDA was negative $295 million due to noncash mark-to-market adjustments.
Convertible offering and share repurchase: Completed a $1.15 billion convertible offering in November 2025, using proceeds to repurchase $460 million worth of shares, reducing outstanding shares by 20% since December 2024.
AI lease market strategy: Focused on balancing lease rates, delay provisions, capital structures, and counterparty quality to optimize returns. The company is building durable, scalable relationships for AI infrastructure monetization.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Bitcoin Price Volatility: The company experienced challenging bitcoin price action, which, combined with rising network difficulty, led to some of the lowest hash prices in history during the quarter. This directly impacted revenue and profitability.
Rising Network Difficulty: The increase in network difficulty for Bitcoin mining has negatively affected gross margins, which declined from 57% to 47% year-over-year.
Power Costs: Power prices increased marginally from $0.049 to $0.056 per kilowatt hour, adding to operational costs.
AI Expansion Capital Intensity: The company noted that capital intensity is increasing as it expands into AI infrastructure, which could strain financial resources if not managed carefully.
Revenue Decline: Quarter-over-quarter, revenues declined by $43 million or 19%, primarily due to external headwinds like rising network difficulty and softer Bitcoin prices.
Net Loss and Adjusted EBITDA: The company reported a net loss of $379 million and negative adjusted EBITDA of $295 million, driven primarily by noncash mark-to-market adjustments to Bitcoin's fair value.
Operational Costs for AI Strategy: Professional fees, payroll, and G&A expenses are expected to increase as the company executes its AI strategy, potentially impacting profitability.
Dependence on Bitcoin Mining: Despite diversification efforts, Bitcoin mining remains foundational to the business, making the company vulnerable to fluctuations in Bitcoin prices and mining economics.
Regulatory and Market Risks in AI: The company is entering the AI infrastructure market, which involves risks related to tenant-driven specifications, regulatory approvals, and market demand.
Debt Levels: The company has a total debt of approximately $1.8 billion, which could pose risks if cash flows from operations or new ventures do not meet expectations.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
AI Infrastructure Development: CleanSpark is transitioning into a digital infrastructure and data center development company, focusing on AI monetization. The company is in the second phase of AI development, involving tenant-driven technical and commercial alignment. Future plans include structured long-term monetization of AI assets.
Expansion into Texas: CleanSpark acquired 271 acres in Austin County, Texas, with 285 megawatts of contracted power, and initiated a second development in Brazoria County, Texas, with an initial 300-megawatt demand load expandable to 600 megawatts. These assets aim to support multiphase AI campus deployments.
AI Lease Market: The company sees improving lease economics in AI infrastructure, with rising rates, balanced risk-sharing terms, and strong credit market support. CleanSpark aims to build durable, scalable relationships for monetizing its portfolio over time.
Bitcoin Mining Operations: Bitcoin mining remains foundational, providing strategic advantages in power acquisition and funding for AI infrastructure. The company plans to redeploy miners profitably during load transitions to AI operations.
Digital Asset Management (DAM) Strategy: CleanSpark's DAM strategy generated $13 million in cash returns during the quarter, representing 24% of normalized adjusted EBITDA. The company plans to continue leveraging DAM for capital efficiency and liquidity management.
Capital Strategy for AI Data Centers: CleanSpark is exploring financing options for AI data centers, focusing on minimizing dilution. The company has over $800 million in liquidity available and is in discussions with Grade A credit quality tenants for future partnerships.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
Share Repurchase Program: In November 2025, CleanSpark completed a $1.15 billion convertible offering as part of its strategic evolution. A portion of the proceeds was used to repurchase $460 million worth of shares, bringing total share repurchases to over $600 million since December 2024. This resulted in approximately 20% of the company's shares outstanding being repurchased. The company emphasized that dilution is not a strategy, but discipline is.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:Can you talk about the demand environment for HPC and how it has changed in the last 90-100 days?
A:The demand for HPC has been escalating. Six months ago, there was enthusiasm for signing deals, but now the company is being more pragmatic about evaluating opportunities. They have received positive feedback from presenting an end-to-end solution at the Pacific Telecom Conference. They are entertaining interest from trillion-dollar balance sheet companies for long-term leases. Additionally, Amazon's commitment to invest $200 billion in AI infrastructure by 2026 further supports the demand.
Q:Is there equal demand for the three sites: Sealy, Sandersville, and Brazoria?
A:The highest demand is for Sandersville due to its 250 MW capacity and already energized substation. Sealy's energization is expected in Q1 2027 for the first 207 MW, and Brazoria is also appealing but less so compared to Sandersville.
Q:Is the rising demand for AI data centers indicative of demand across the sector from hyperscalers?
A:Yes, demand is escalating rapidly. Jeff Thomas, leading the AI venture, has been receiving numerous inbound inquiries, indicating strong interest from hyperscalers.
Q:How confident are you in signing a contract in the near future given your construction commitments?
A:The company is very confident. They are taking a disciplined approach by designing facilities in advance to meet delivery timelines and avoid failure-to-deliver risks. They are also working on securing supply chains and implementing approved reference architectures to ensure commitments are met.
Q:Has your thought process changed regarding operating Bitcoin mines in tandem with HPC expansion?
A:The company uses Bitcoin mining as a tool to monetize energy quickly while building data centers. They operate Bitcoin mining profitably until the data center is ready, then transition the power to support the data center. They also have flexibility to migrate mining to profitable locations.
Q:What milestones should we look for in the HPC business over the next few quarters?
A:The company is focusing on establishing build parameters and working on a modular approach for data centers. They are collaborating with Submer for modular MEP solutions, which will shorten timelines and provide flexibility for hyperscalers. The next milestones include finalizing designs and ensuring delivery certainty.
Q:Does the recent downturn in Bitcoin prices change your HODL approach?
A:No, the company is not planning to sell its Bitcoin holdings despite the downturn. They continue to sell nearly 100% of their monthly production and focus on expanding AI data centers. They are also improving fleet efficiency with new machines.
Q:How should we think about growth at the employee level as you pivot into HPC?
A:The company is measured in bringing on employees as needed. They also use outside consultants or contractors to fill gaps temporarily. Growth in employee numbers will slowly increase throughout the year.
Q:Does owning additional land at Sandersville change the terms of HPC contracts?
A:Owning the land allows the company to move into specific design alignment exercises and map out timelines for data center deployment. It provides more control and specificity in discussions with potential tenants.
Q:How might ERCOT's proposed large load batch study process affect the energization timeline for Sealy and Brazoria projects?
A:The study process is still in the comment period, but the company believes their projects are in favorable positions due to their maturity and location. Sealy's energization is expected in Q1 2027, and Brazoria's timeline is estimated around Q4 2027 to Q1 2028.
Q:Are there other power markets that look more attractive than Texas for adding more power?
A:The company is evaluating both in-front-of-the-meter and behind-the-meter power opportunities in various markets, including Georgia, Tennessee, Wyoming, and Mississippi. They are also exploring behind-the-meter generation for data centers.
Q:How advanced are the HPC tenant discussions?
A:There are multiple potential tenants for Sandersville, with one clear frontrunner. The company is collaborating with this frontrunner on site placement and design but is keeping options open.
Q:When are you expecting to have power available at the two new sites in Texas?
A:For Sealy, the first 207-209 MW is expected in the first half of 2027, with additional power in 2028 and 2029. For Brazoria, energization is estimated around Q4 2027 to Q1 2028, pending closing conditions.
Q:How are you selecting counterparties for HPC leases?
A:The company prioritizes Grade A credit quality tenants to ensure financeability and better cost of capital. They aim to set a high standard for lease agreements and are negotiating terms to ensure a win-win situation.
Q:How much of your miner fleet is economic to operate at current Bitcoin prices?
A:Less than 10% of the fleet is not profitable at the current $30 hash price. The company actively manages its fleet to optimize efficiency and profitability.
Q:What are your CapEx plans for this year and next, and how will it be allocated between Bitcoin and HPC?
A:The majority of CapEx will be directed towards AI data centers, with costs ranging from $9 million to $11 million per megawatt. Investment in Bitcoin mining will be minimal, focusing on deploying pre-paid equipment and improving efficiency.
Q:What are your predictions for network difficulty in response to current Bitcoin prices?
A:Network difficulty is expected to decrease significantly due to weather events and lower Bitcoin prices. This adjustment will benefit efficient miners like the company, allowing them to mine more Bitcoin as less efficient miners unplug.
Q:Do you have a timeline for executing behind-the-meter opportunities?
A:The timeline for behind-the-meter opportunities is still under evaluation. The company is exploring various deployment types and will align decisions with tenant needs.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer to the question about whether owning additional land at Sandersville changes the terms of HPC contracts. They stated it was too early to comment directly on prepayment or deposit discussions, leaving the specifics unclear.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI center
AI infrastructure
AI market
AI monetization
County Texas
DAM
Financial Results
acre
adjustment attention
alignment
asset AI
attention balance
basis trade
bitcoin
campus
cash balance
cash flow
center capital
decision
deployment
difference noncash
dilution discipline
economics
evolution
expansion AI
lease
liquidity
margin cash
market adjustment
market option
megawatt power
network difficulty
noncash market
platform
power land
sale
strength
substation
tenant
today website
value end
CLSK Transcript
CleanSpark, Inc. (CLSK) Q2 2026 Earnings Call Transcript
Positive5-11
Despite regulatory risks, CleanSpark's strong financial performance, including a 15% revenue increase and a shift to net income, indicates effective operational efficiency and cost management. The positive financial metrics, particularly in bitcoin mining output and adjusted EBITDA, suggest a favorable outlook. With a market cap of $3.66 billion, the stock is likely to see a moderate positive reaction, aligning with the 'Positive' sentiment rating, as these results are likely to instill confidence among investors.
CleanSpark, Inc. (CLSK) Q1 2026 Earnings Call Transcript
Positive2-6
The earnings call summary and Q&A indicate strong financial performance, strategic partnerships, and a focus on AI data centers, with stable cash flows and high margins expected. While Bitcoin mining presents risks, the company is transitioning to AI, a growing market. The sentiment is positive, with strategic expansions, partnerships, and a focus on tenant acquisition for AI campuses. Despite some uncertainties in the Q&A, the overall outlook is optimistic, suggesting a positive stock price movement.
CleanSpark, Inc. (CLSK) Q4 2025 Earnings Call Transcript
Positive11-26
The earnings call summary and Q&A reveal strong financial performance with a focus on growth and efficiency. The strategic expansion in hash rate and power pipeline, coupled with regulatory tailwinds and a strong capital strategy, are positive indicators. The Q&A section provided clarity on risks and strategic initiatives, further boosting confidence. Despite some concerns over expenses and Bitcoin price fluctuations, the overall sentiment is optimistic, particularly with the potential for increased shareholder returns and strategic partnerships. Given the market cap, a positive stock price movement of 2% to 8% is expected.
CleanSpark, Inc. (CLSK) Q3 2025 Earnings Call Transcript
Positive8-8
The earnings call highlights strong financial performance with a significant revenue increase and gross margin, operational efficiency improvements, and strategic growth plans. The Q&A section reveals management's focus on mitigating risks and leveraging market opportunities, such as power management and M&A. While some responses were vague, the overall sentiment is positive, supported by strategic flexibility and a robust pipeline for future growth. Given the company's market cap and strategic initiatives, the stock is likely to experience a positive movement in the short term.
CLSK Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
