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LM Funding America Inc. (market cap: $8.47M) reported its first-quarter 2025 earnings, reflecting a significant drop in year-over-year revenue and a notable premarket stock price decline. The company mined 24.3 Bitcoins, generating $2.3 million in revenue, a 25% sequential increase. This was overshadowed by a 50.5% decrease in year-over-year revenue, continuing a trend of revenue decline (-18.7% over the last twelve months). The company’s stock fell 11.52% in premarket trading, with shares priced at $1.46. InvestingPro analysis reveals 13 additional key insights about LMFA’s performance and outlook.
Key Takeaways
- LM Funding America recorded a 25% sequential revenue increase from Bitcoin mining.
- Year-over-year revenue declined by 50.5%.
- The company reported a net loss of $5.4 million.
- Stock price fell by 11.52% in premarket trading.
Company Performance
LM Funding America’s performance in Q1 2025 was marked by both advancements in operational strategy and challenges in financial results. With a beta of 1.54, the stock shows higher volatility than the broader market. The company mined 24.3 Bitcoins, contributing to a sequential revenue increase. While the overall revenue saw a significant year-over-year decline, the company maintains strong liquidity with a current ratio of 8.63. The firm continues to focus on operational efficiency and technological upgrades, such as deploying LUXOS upgrades and shifting to immersion cooling technology.
Financial Highlights
- Revenue: $2.3 million from Bitcoin mining, up 25% sequentially.
- Year-over-year revenue declined by 50.5%.
- Net loss: $5.4 million.
- Core EBITDA loss: $2.8 million.
- Cash position: $1 million.
- Bitcoin holdings valued at $13.2 million.
Market Reaction
Following the earnings announcement, LM Funding America’s stock fell 11.52% in premarket trading, bringing the share price to $1.46. This decline reflects investor concerns over the significant year-over-year revenue drop and ongoing net losses. Trading at a Price/Book ratio of just 0.23, InvestingPro analysis suggests the stock may be undervalued compared to its Fair Value. Get detailed valuation analysis and access to the comprehensive Pro Research Report, part of the coverage of 1,400+ US stocks, exclusively on InvestingPro.
Outlook & Guidance
Looking ahead, LM Funding America plans to complete its Oklahoma site expansion by Q3 2025 and explore new site opportunities in Oklahoma, Pennsylvania, and potentially Texas. The company aims to continue its Bitcoin accumulation strategy and may consider debt or equity financing using its Bitcoin holdings. With a relatively low debt-to-equity ratio of 0.21, the company maintains financial flexibility for future expansion.
Executive Commentary
CEO Bruce Rogers emphasized the company’s commitment to its Bitcoin holding strategy, stating, "We hodl." Ryan Duran, President of US Digital Mining, highlighted the advantages of immersion technology, saying, "Immersion technology will allow us to operate in crowded and harsh environments." These comments underscore the company’s strategic focus on technological innovation and long-term value creation.
Risks and Challenges
- Bitcoin price volatility could impact future revenue.
- The company’s net loss and cash position raise concerns about financial sustainability.
- Potential operational challenges in expanding to new sites.
- Market competition and technological advancements in Bitcoin mining.
Q&A
During the earnings call, analysts inquired about the Oklahoma site buildout and potential geographic expansion. Executives confirmed no immediate plans for expansion into Texas but are exploring other opportunities. The discussion also covered machine sales and inventory management, reflecting the company’s strategic focus on operational efficiency.
Full transcript - LM Funding America Inc (LMFA) Q1 2025:
Conference Operator: Good day, and thank you for standing by. Welcome to the LM Funding First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. After the presentation, there will be a question and answer session.
You will then hear an automated message advising your hand is raised. Please note that today’s conference is being recorded. I will now hand the conference over to your speaker host, Cody Fletcher of Investor Relations. Please go ahead.
Cody Fletcher, Investor Relations, LM Funding: Thank you, operator, and thank you all for joining LM Funding America’s first quarter twenty twenty five earnings conference call. Joining us today are Chairman and CEO, Bruce Rogers President of US Digital Mining, Ryan Duran and CFO, Richard Russell. For today’s call, have uploaded an accompanying supplemental investor presentation, which can be found under the Events section of LM Funding’s Investor Relations website. Before we get started, please note that our remarks today may include forward looking statements. These statements are subject to risks and uncertainties and actual results may differ materially.
We will also reference certain non GAAP financial measures today. Please refer to our 10 Q filing and our website for a full reconciliation of these non GAAP performance measures to the most comparable GAAP measures. For a comprehensive discussion of these and other risks, please refer to our filings with the SEC available on sec.gov and in the investor section of our website at www.lmfunding.com/investors. I will now turn the call over to our CEO, Bruce Rogers. Bruce?
Bruce Rogers, Chairman and CEO, LM Funding: Thanks, Cody. Good morning and thank you for joining us today. First quarter of twenty twenty five marked another period of strong execution and strategic progress for LM Funding. Since entering the Bitcoin mining business in 2021, we have transitioned from an asset light model to a vertically integrated operator, gaining full control of our fleet, improving margins and reducing operational risks. We mined 24.3 Bitcoin for the quarter, continuing to scale our production capabilities while improving our operational efficiency.
Cody Fletcher, Investor Relations, LM Funding: In
Bruce Rogers, Chairman and CEO, LM Funding: parallel, we’ve begun monetizing our curtailment energy sales by selling energy back to the grid during periods of peak demand, creating a natural hedge against Bitcoin price volatility and further reducing our cost of operations. Our disciplined approach to cost management also drove a meaningful reduction in operating expenses as we continue to build a leaner, more agile, vertically integrated business without compromising performance. Rick will cover this in more detail shortly. We’re seeing progress in margin improvements and cost control, furthering our disciplined growth strategy. Finally, we again call attention to the disparity between the value of our Bitcoin held versus our market cap.
On April 30, we held 148.7 Bitcoin. Given a market price of $104,000 per Bitcoin, our Bitcoin holdings would be worth $15,500,000 or approximately $3.1 per share when our stock is trading at $1.87 as of May 13 close. I’ll now turn the call over to Ryan Duran, our President of U. S. Digital Mining, to review our operational highlights in more detail.
Ryan?
Ryan Duran, President of US Digital Mining, LM Funding: Thank you, Bruce. In the first quarter, we focused on maximizing the operational efficiency of our existing infrastructure while targeting strategic growth opportunities. We achieved five sixty petahash at the March, deployed LUXOS upgrades across our Oklahoma fleet, and executed our first power sales stack to the grid. In May, we ordered two one megawatt immersion mining containers for our previously announced two megawatt expansion of our Oklahoma site. We expect to complete construction and energization by the end of third quarter, pending international shipping timelines.
We believe the shift to immersion cooling marks a meaningful advancement in our operational strategy. This technology will allow us to operate in crowded and harsh environments that offer access to lower cost power. Immersion technology reduces dust, heat, and humidity, leading to more consistent performance with longer equipment lifespan and improved reliability. We expect Immersion Technology to expand our operational horizons and add shareholder value. Our shift to Immersion cooling led to the strategic decision to sell the two fifty six Bitmain S21 plus machines ordered last December and delivered this April.
Machine prices have been relatively stable throughout this period, so we anticipate this transaction to be cash neutral. Lastly, as mentioned in our April production update, we began relocating our 800 machines from our hosting partner site to our wholly owned Oklahoma site. Once installed, these machines will operate with lower power costs, enabling us to mine bitcoin more cost effectively. Our CFO, Rick Russell, will now provide a review of the financial highlights for the first quarter of twenty twenty five. Rick?
Richard Russell, CFO, LM Funding: Thank you, Ryan. In the first quarter of twenty twenty five, we mined 24.3 Bitcoins at an average price of $93,500 which was 12% more Bitcoin mined sequentially. Bitcoin mining revenue for the quarter was approximately $2,300,000, up 25% sequentially, reflecting the success of our infrastructure investments and improved machine efficiency from the Luxe OS upgrades. Year over year revenue declined 50.5% largely due to the impact of the April 2024 having. Additionally, we have made significant strides in our operational strategy.
As Bruce mentioned, during the first quarter we generated approximately $150,000 from power cells back to the grid, offsetting our mining cost of revenue. This contributed to an improvement in mining margins from 31.2 in Q4 twenty twenty four to 38.5% in q one twenty twenty five. In April, we generated approximately $120,000 in power sales, demonstrating early momentum in this initiative. By incorporating curtailment into our operational models, we aim to stabilize operating costs by establishing a partial hedge against Bitcoin price volatility. As Bruce also mentioned, another highlight for the quarter was reduction in our staff costs, professional fees, SG and A, and other costs by 7.7% year over year.
This improvement was driven by our transition to a leaner operational model while maintaining output and efficiency. Net loss for the quarter was 5,400,000.0 with a core EBITDA loss of 2,800,000.0, both driven by a 1,800,000.0 Bitcoin noncash write down for fair market value of our Bitcoin held as of 03/31/2025. However, as of the date of this call, the 1,800,000 write down has nearly reversed given Bitcoin’s price recovery to approximately $104,000 as of 05/13/2025. We finished the quarter with $1,000,000 in cash and our Bitcoin holdings increased 160.2 Bitcoin valued at 13,200,000.0 as of 03/31/2025 or approximately $2.58 per share. Using our April month end holdings of 148.7 and a Bitcoin price of 104,000 as of 05/13/2025, the calculated value of our holdings would be approximately $15,500,000 or about $3 per share compared to our May 13 stock price of $1.87 on the same date.
Bruce will now provide some thoughts on our outlook and strategy heading into the remainder of 2025.
Bruce Rogers, Chairman and CEO, LM Funding: Thanks Rick. Looking ahead, as Ryan mentioned, we’re excited to begin immersion mining with expansion of our Oklahoma site. We believe immersion mining will produce immediate returns in Oklahoma and open up unique mining site selection opportunities to us. We’re seeking to deploy immersion technology at greenfield and brownfield sites offering five to 20 megawatts, facilities that typically fall below the acquisition thresholds of larger operators or offer environments best suited for immersion mining. In Oklahoma, curtailment and energy sales complement our mining revenue and provide a natural hedge against Bitcoin price volatility.
By treating Bitcoin mining sites like ours as power producers, our energy agreement in Oklahoma allows us to sell curtailed energy back to the grid at market prices. We hope to build a sustainable business model around similar sites that can thrive in various market conditions, mining Bitcoin with greater flexibility and at lower costs. We remain bullish on Bitcoin and committed to our long term Bitcoin accumulation strategy. We hodl. We began our treasury strategy in 2021.
Holding and mining Bitcoin remains a logical continuation of this strategy. Recent news reports indicate we’re not alone in our thinking. In 2024, we borrowed $5,000,000 secured by our Bitcoin holdings. So like others in the news, we may want to add Bitcoin to our balance sheet with debt and or equity. In closing, we believe this approach to Bitcoin treasury management will create substantial long term value for our shareholders, particularly given that our Bitcoin holdings are currently valued at more than one and a half times our market capitalization.
Thank you for your time this morning and your continued support. Thank
Conference Operator: you, Bruce. Our first question coming from the line of Michael Donovan with H. C. Wainwright. Your line is open.
Michael Donovan, Analyst, H.C. Wainwright: Hi, Bruce, Rick, Ryan. Thank you for taking my question. This is Michael Donovan calling in for Kevin Dede. Can you guys talk a little
Bruce Rogers, Chairman and CEO, LM Funding: bit more about the Oklahoma site build out and what you’re thinking about currently in Texas? Sure. Texas has got a counterparty issue, so I don’t think that there’s anything in the short horizon force at this point. Oklahoma, we are up and running and we’re will continue to convert containers to expand and that is on the timetable that we’ve discussed earlier and update you as the quarter progresses.
Richard Russell, CFO, LM Funding: Now the two megawatts we expect I think Brian, the machine to be ready
: to ship to us from China. We’re gonna head over.
Bruce Rogers, Chairman and CEO, LM Funding: Okay.
Michael Donovan, Analyst, H.C. Wainwright: I appreciate that. Now after that April sales of the s 21, so does that take care of all the machines that were in inventory and not plugged in?
Bruce Rogers, Chairman and CEO, LM Funding: By taking care of, I don’t know what that means. So we did test 21s and Pluses. Yes from the
: A plus.
Bruce Rogers, Chairman and CEO, LM Funding: Pluses rather.
: Okay. Into the hosting file and pull up on the older SIT that
Richard Russell, CFO, LM Funding: the net revenue
: will be about the same at the cost.
Michael Donovan, Analyst, H.C. Wainwright: Okay. Now then for, I guess, just a 20,000 foot perspective question with the new sites. Do you have any geographies in mind targeting the five to 20 megawatt green, greenfield, brownfield build outs? Are you
: exploring? Exploring?
Bruce Rogers, Chairman and CEO, LM Funding: Actually, the geography of our energy provider to have an insight that would like to be found. That’s taking us right now a lot. This is in Oklahoma, Pennsylvania. I’ll be calling you from Texas.
: We think
Bruce Rogers, Chairman and CEO, LM Funding: we’ll have an offering in Texas that has this kind of power arrangement.
Michael Donovan, Analyst, H.C. Wainwright: Okay, great. Well thanks guys and best of luck.
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