CLSK Shares Slides 8.77% in After Hours, CleanSpark Reports $42.3M Net Loss in Q4 2022

UTC by Steve Muchoki · 2 min read
CLSK Shares Slides 8.77% in After Hours, CleanSpark Reports $42.3M Net Loss in Q4 2022
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CleanSpark revenues for Q4 2022 grew to $26.2 million, which is an increase of $3.3 million from $22.9 million the prior year.

CleanSpark Inc (NASDAQ: CLSK), a cryptocurrency mining company based in the United States, reported its Q4 2022 and the financial year ending September 30, 2022. According to the SEC filings, revenue collected in the fourth quarter by CleanSpark came in at $26.2 million. However, the mining company reported a net loss of $42.3 million. As such, CLSK shares dropped approximately 8.77 percent during Wednesday’s after-hours trading session.

The company has blamed external factors for the net less, including Bitcoin price, which sharply declined in the fourth quarter.

“The majority of these fourth-quarter losses were primarily due to impairment of goodwill and bitcoin balances, as well as non-cash charges due to modification of equity instrument,” Gary A. Vecchiarelli, CleanSpark CFO, noted.

CleanSpark Q4 2022 Financial Highlights

According to the earnings report, CleanSpark revenues for the fourth quarter grew to $26.2 million, an increase of $3.3 million from $22.9 million for the same prior year. As of September 30, 2022, CleanSpark announced a cash reserve of $20.5 million and Bitcoin worth $11.1 million. As a result, the company announced a total asset of approximately $452.6 million, including mining hardware.

“Our rapid growth has continued subsequent to our fiscal year end as we approach 6.0 EH/s, exceeding our calendar year-end guidance once again. We have four impressive sites that we own 100% with no partners and little debt, which resulted in mining 3,750 bitcoins, a 320% increase in production for the fiscal year,” Vecchiarelli added.

Reportedly, CleanSpark had a working capital of $16.8 million and $21.2 million of debt as of September 30, 2022. Consequently, the company recorded a net loss for the year of $57.3 million, an increase of 163 percent compared to $21.8 million in the prior year.

Market Outlook

As with most related companies, CleanSpark is feeling the pressure of low Bitcoin prices amid increased mining difficulty. Moreover, energy companies are using excess electricity mining cryptocurrencies, thus increasing the overall difficulty.

Earlier this year, CleanSpark announced a partnership with Lancium to build clean campuses in west Texas to host 200 MW, or about 6.6 EH/s. However, Lancium informed CleanSpark that capital constraints had affected their ability to meet their commitments. As such, the expected completion dates have been pushed into late 2023.

With no definite timing from Lancium, CleanSpark’s management team reviewed its 2023 calendar year-end guidance to 16 EH/s.

Meanwhile, CLSK has seen its stock market decline approximately 76 percent YTD, with more pain anticipated in the near future.

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Steve Muchoki

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