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Introduction & Market Context
LM Funding America Inc (NASDAQ:LMFA) presented its Q1 2025 investor slides on May 15, 2025, highlighting sequential revenue growth and improved mining margins despite the impact of April’s Bitcoin halving event. The cryptocurrency mining company, which has positioned itself as an emerging leader in Bitcoin mining, faces a challenging environment where mining rewards have been cut in half while competition for those rewards intensifies.
The company’s stock closed at $1.65 on May 14, 2025, representing an 11.76% decline in the most recent trading session. This valuation places LMFA’s market capitalization significantly below the value of its Bitcoin holdings, creating what management views as a potential value opportunity for investors.
Quarterly Performance Highlights
LM Funding reported total revenue of $2.4 million for Q1 2025, representing a 19.4% sequential increase from Q4 2024, though still down significantly from the $4.7 million reported in Q1 2024. Bitcoin mining revenue, which accounted for $2.3 million of the total, increased 25.3% sequentially.
The company mined 24.3 Bitcoin during the quarter while operating with a hashrate of 610 PH/s as of April 30, 2025. Notably, mining margin improved to 38.5% in Q1 2025, up from 31.2% in Q4 2024, driven in part by $150,000 in power sales back to the grid.
As shown in the following revenue trend chart:
The company’s revenue trajectory reflects the impact of the April 2024 Bitcoin halving event, which reduced mining rewards across the industry. Despite this headwind, LMFA has managed to achieve sequential growth through operational improvements and strategic initiatives.
Financial Analysis
While the company showed sequential improvement, year-over-year comparisons reveal significant challenges. The Q1 2025 revenue of $2.4 million represents a nearly 50% decline from the $4.7 million reported in Q1 2024. Similarly, Core EBITDA swung from a positive $4.4 million in Q1 2024 to a negative $2.8 million in Q1 2025.
The financial results breakdown shows:
LM Funding reported a net loss of $5.4 million for Q1 2025, which was driven by multiple factors including a $1.8 million non-cash write-down for the fair market value of Bitcoin held, lower average hash rate during the quarter, and revenue impacts from mining curtailment.
The company has maintained cost discipline, with staff costs, payroll, professional costs, SG&A and other expenses totaling $2.0 million, down 7.7% year-over-year. This cost control has helped partially offset the revenue challenges.
The reconciliation of net income to Core EBITDA provides additional insight into the company’s operational performance:
Strategic Initiatives & Outlook
LM Funding is pursuing several strategic initiatives to improve profitability and operational efficiency in the post-halving environment. The company has upgraded its mining machines with LuxOS software to enhance efficiency and is beginning a 2 MW expansion at its Oklahoma site with immersion cooling systems.
The operational highlights showcase these initiatives:
The company’s differentiated strategy focuses on several key elements:
Unlike larger competitors who focus on massive mining facilities, LMFA is targeting smaller 5-20 MW facilities, which management believes offer better economics and flexibility. The company is also selling 256 S21+ mining machines recently received from Bitmain and relocating 800 mining machines from a hosting partner to its Oklahoma site to take advantage of lower power costs.
A key component of the company’s strategy is its ability to curtail mining operations during periods of high electricity prices and instead sell power back to the grid. This flexibility generated $150,000 in power sales during Q1 2025, helping to offset mining expenses and improve margins.
Balance Sheet & Bitcoin Holdings
As of March 31, 2025, LM Funding reported cash of $1.0 million and total debt of $6.7 million. The company’s balance sheet summary shows:
Perhaps the most notable aspect of LMFA’s financial position is its significant Bitcoin holdings. As of May 13, 2025, the company held 148.7 Bitcoin valued at approximately $15.5 million (based on a Bitcoin price of $104,000). This translates to Bitcoin holdings worth approximately $3.01 per share, based on 5,133,412 shares outstanding.
The value of these Bitcoin holdings substantially exceeds the company’s current market capitalization, creating what management describes as a compelling value proposition for investors. This substantial discount to Bitcoin holdings value suggests the market is either significantly undervaluing the company’s mining operations and future potential or applying a risk discount due to ongoing operational challenges and cash burn.
LM Funding continues to maintain its "HODL" strategy of retaining mined Bitcoin, betting on long-term price appreciation despite the short-term impact on cash flow and reported earnings. This approach aligns with the company’s view that Bitcoin will continue to increase in value over time, potentially providing greater returns than immediate liquidation.
As the Bitcoin mining landscape continues to evolve following the April 2024 halving event, LM Funding’s focus on operational efficiency, strategic power management, and technological upgrades will be crucial to navigating the challenging competitive environment while leveraging its substantial Bitcoin holdings.
Full presentation:
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