Bitfarms Struggles with Q4 Loss Amid Rising Costs and Mining Difficulty

Bitcoin miner Bitfarms (BITF) faced a challenging fourth quarter as the company reported an 8 U.S. cent loss per share, a sharp decline from the 5 cent profit it achieved the previous year. According to a recent filing with the U.S. Securities and Exchange Commission, Bitfarms’ gross mining margin plummeted from 52% in Q3 to 33% in Q4.

The company struggled with a drop in bitcoin prices, which reached as low as $16,000, as well as increased mining difficulty. As a result, the profitability of mining fell by 25% during the quarter, according to Luxor Technologies’ hashprice.

Bitfarms failed to reach its goal of 5 exahash/second (EH/s) of computing power by the end of 2022, attaining only 4.5 EH/s. The firm has now set a revised target of 6 EH/s by the end of 2023. CEO Geoff Morphy stated that the company is actively evaluating potential acquisitions to complement its geographically diverse mining operations.

The Toronto-based company managed to reduce its debt obligations by 86% compared to June 2022, following a $21 million settlement with bankrupt lender BlockFi. However, Bitfarms’ earnings before interest, tax, depreciation, and amortization (EBITDA) for Q4 slumped to $7.4 million, down from $29 million in the same period the previous year. The company’s revenue for the quarter was $27 million, approximately half of the prior-year figure. For the entire year of 2022, Bitfarms reported a $1.15 basic loss per share, with revenue falling 15% compared to 2021.