Bit Digital Q3 2026 Earnings Call Transcript

Bit Digital (NASDAQ:BTBT) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Bit Digital’s third-quarter revenue was $27.1 million, down from $32.1 million in the second quarter, but up 7% year-over-year for the first nine months at $87.1 million.

The company’s business composition is shifting, with cloud, colocation, and Ethereum staking now accounting for 91% of consolidated revenue, compared to 74% a year ago.

White Fiber’s NC1 facility is fully operational, contributing to a $865 million contract over 10 years, and White Fiber secured a $300 million credit facility.

Bit Digital owns approximately 163,726 ETH and earned 474 ETH in rewards during the quarter with an average annualized yield of 3.4%.

The company repaid $30 million of a loan from Galaxy and advanced an additional $70 million to White Fiber, utilizing liquid staking ETH as collateral.

Net income attributable to Bit Digital shareholders was $28.5 million, or $0.08 per diluted share, despite a decrease in digital asset mining revenue.

Management discussed potential share repurchase programs but highlighted the need for shareholder approval and careful consideration of capital allocation.

The company is exploring alpha-oriented business opportunities to enhance revenue but provided limited details on these initiatives.

Bit Digital’s NAV is trading at a 39% discount, and management is considering strategic actions to address this, including potential sales of White Fiber shares.

Full Transcript

OPERATOR

During the call, all participant lines will be in listen-only mode. Following management’s remarks, we will open the line for questions. If you’d like to ask a question at that time, please press star-1 on your telephone keypad. As a reminder, today’s call is being recorded. I’ll now turn the call over to your host, Charlie Brady, Head of Investor Relations at Bit Digital. Charlie, please go ahead.

Charlie Brady (Head of Investor Relations)

Thank you, and welcome everyone to Bit Digital’s third quarter 2026 earnings call. Joining me today are Samir Tabar, our Chief Executive Officer, and Eric Young, our Chief Financial Officer. Before we begin, I’d like to remind everyone that some of the statements we make on this call are forward-looking in nature and subject to risks and uncertainties that could cause actual results to differ materially from such. Risks and uncertainties include, but are not limited to, those factors described in today’s earnings press release, our Form 10-Q for the quarter ended September 30, 2026 filed today, as well as other filings we may make with the SEC.

From time to time throughout the call, we may also refer to non-GAAP financial measures. Reconciliations to the most directly comparable GAAP measures can be found in our earnings materials available on our website. Following today’s prepared remarks, we will open the call for questions. With that, I’ll turn the call over to

Samir Tabar (Chief Executive Officer)

Thank you, Charlie, and good morning everyone. Charlie recently joined us to lead investor relations. It’s really good to have him with us on his first Bit Digital earnings call. The third quarter is a useful reminder of why we built Bit Digital as a strategic asset company. Our goal is to own high-conviction assets, actively manage and make them productive, and allocate capital in a way that compounds value per share over time. Rather than passively waiting for the cycle to improve, the mix of our business is changing. Some of that is deliberate, particularly our continued exit from bitcoin mining. Some reflects the timing and variability of cloud services revenue.

At the same time, colocation continues to expand and Ethereum staking revenue has improved sequentially. Together, cloud, colocation, and staking accounted for about 91% of consolidated revenue this quarter, compared with about 74% a year earlier. That is a meaningful change in the composition of the business. Last quarter we described how we were putting our balance sheet to work. This quarter the focus was on turning that capital into operating assets and contracted revenue. In August, White Fiber’s NC1 facility began contributing revenue on the first 20 megawatt data hall, and although some temporary issues related to switchgear slightly delayed the ramp, today the full 40 of contracted revenue is operational. That contracted revenue is connected to an $865 million contract over 10 years.

In addition, White Fiber recently closed a $300 million secured credit facility which is expected to be funded later this month and will support repayment of the bridge loan we made to White Fiber. Following the end of the third quarter, White Fiber completed the acquisition of the NC2 and NC3 sites in Yadkin County, North Carolina, with additional development opportunities. Turning to Ethereum. As of the end of September, we owned approximately 163,726 ETH and ETH equivalents. During the third quarter, native staking generated approximately 474 ETH in rewards at an average annualized yield of about 3.4%. Through the first nine months of 2026, we earned 1,863 ETH through native staking. In September, following White Fiber’s $30 million delayed draw facility repayment, Bit Digital repaid $30 million of the loan from Galaxy, allowing us to reduce the amount of collateralized liquid ETH from 39,000 to 19,000.

Subsequent to the end of the third quarter, White Fiber received an additional $70 million drawdown, bringing the total outstanding under the facility to 100—excuse me, to $100 million. As of October 21, collateralized liquid ETH totaled 64,000, equating to 70,892 ETH. We remain focused on the simple test for every allocation decision: what does it do for value per share after considering the cost of capital and the risks we assume? We do not try to own the most ETH or announce the most transactions. We are trying to make the assets we already own work harder and protect the optionality to act when the economics justify it.

With that, I’ll turn the call over to Eric, our CFO, to review the financial details.

Eric Young (Chief Financial Officer)

Thank you, Sam. Good morning everyone. Our results consolidated White Fiber in full, with a portion attributable to non-controlling interests. Third quarter revenue was $27.1 million, compared with $32.1 million in the second quarter. For the first nine months, revenue was $87.1 million, up 7% year over year. Cost of revenue was $11.9 million, excluding depreciation and amortization of $11.1 million, which is reported separately. Operating cash flow for nine months was $163 million, supported materially by customer advance payments. These payments relate to services we have yet to deliver.

Consolidated net income was $0.6 million after allocating $27.9 million of losses to non-controlling interests. Net income attributable to Bit Digital shareholders was $28.5 million, or $0.08 per diluted share. Turning to our operating segments, cloud services revenue was $18.1 million compared with $23.8 million in the second quarter. This includes $3.4 million of termination fee revenue from our initial customer. No recurring revenue following that customer’s termination was partially offset by deployments for new customers. Colocation revenue was $5.4 million compared with $4.7 million in the second quarter and $1.7 million a year ago. Growth reflected MTL3 and the initial contribution from NC1, which generated about $1.1 million of lease income during the quarter.

Native staking revenue was $1.0 million, compared with $903,000 in the second quarter. We earned 474 Ethereum, up from 440 Ethereum. Rewards occurring within liquid staking tokens are accounted for separately and are not included in the revenue figure. Digital asset mining revenue was $2.0 million on 28.4 bitcoin mined, compared with $2.4 million on 32.3 bitcoin in the second quarter. Turning to valuation and financing items, we recorded $84 million of gains on digital assets, $5.4 million of gains associated with the transfers of liquid staking tokens into collateral arrangements, and $3.2 million of impairment on liquid staking tokens. Separately, we recorded a $10.7 million gain from remeasurement of the derivative liability associated with our convertible notes. Other income included $17.1 million of unrealized gains on digital assets held through a third-party fund.

White Fiber’s settlement of a portion of its 2031 convertible notes resulted in an $80.8 million induced conversion expense. The transaction involved both cash and WIFI shares. Consolidated interest expense was $10.4 million. Turning to the balance sheet and treasury, at September 30 we held 74,606 Ethereum directly, with a fair value of approximately $200 million. Separately, we held 47,192 liquid staking tokens carried at approximately $98 million and a digital asset collateral receivable carried at $37.1 million. We also maintained digital asset exposure through a third-party fund. Those positions were measured on different accounting bases. Consolidated cash and cash equivalents were $143.5 million.

In quarter-end we repaid $30 million of our Galaxy borrowing in September, leaving $30 million outstanding, but after quarter-end we borrowed an additional $70 million and advanced this additional $70 million to White Fiber in late October. In July, Bit Digital raised $11.6 million net through its at-the-market program, issuing approximately 6.9 million shares at an average price per share of $1.71. Proceeds were used for working capital purposes.

Finally, remaining performance obligations under ASC 606 totaled $729 million at quarter-end. We expect to recognize $13.5 million in the remainder of 2026, approximately $235 million in 2027, and approximately $207 million in 2028, with the remaining balance thereafter. These figures exclude lease arrangements and certain other contracts and variable consideration. They’re not a consolidated revenue forecast. With that, I’ll turn the call back to Sam.

Samir Tabar (Chief Executive Officer)

Thank you, Eric. I want to close with a few thoughts on Ethereum and where Bit Digital fits and the broader transition we see taking place. Eric’s review covered substantial non-cash gains on digital assets as well as changes in our operating revenue mix. Both matter, but when we assess our strategy, we look at the income our assets generate and whether our capital decisions are increasing value per share over time. I’ve previously talked about developments in the Ethereum ecosystem that reinforce why we view the network as a foundation for programmable financial infrastructure. Stablecoins and tokenized funds are examples of how blockchain infrastructure can be used to hold and transfer financial assets. Ethereum faces competition and more network activity does not automatically mean a higher ETH price. Even so, it’s an established ecosystem. Security and developer base are important reasons why we continue to see value in this network.

We’re also closely watching the connection between Ethereum and AI. In October, the Ethereum Foundation highlighted Zkapi, an application that uses Ethereum to support payments for AI and other software services while protecting the link between a payment and the user’s identity. It’s an early example, but what interests us is the potential for software and AI agents to pay for services directly with payments that can be verified and processed automatically.

That is one way Ethereum could become useful. As these applications develop, we see it as a part of a longer-term investment case rather than a near-term revenue assumption. We also recognize the risks. ETH remains volatile, staking revenues vary, and borrowing against liquid staked assets creates collateral and liquidity obligations. Our experience through different market cycles has reinforced the need to manage those exposures alongside our investment conviction.

Our majority stake in White Fiber is another important part of the investment case. It represents ownership of an operating AI infrastructure business that is generating revenue today. All 40 megawatts of contracted capacity at NC1 are now operational and billing, and White Fiber’s broader portfolio of signed customer contracts supports even further growth. Turning to Bit Digital’s valuation, our shares continue to trade at a substantial discount to our NAV. The NAV calculation we have disclosed starts with our ETH, treasury and White Fiber shares, then subtracts the $150 million face amount of our convertible notes. I understand why shareholders want to see action on that discount. We have discussed repurchases before and I want to address where it stands. The Board cannot authorize a program on its own.

Our articles of association require shareholder approval before we can implement a repurchase program, including approval of how the purchases would be made. We recognize the appeal of buying back shares at the current discount to NAV, which is currently about 39%. Before seeking shareholder approval, though, we would need to identify how we would fund those purchases and whether that approach would improve value per share while preserving the liquidity the business needs. The purchase price and the source of funds both matter to that assessment. Selling ETH to fund repurchases, for example, would allow us to reduce the share count, but it would also mean giving up staking rewards and some exposure to any future increase in Ethereum’s value.

We need to determine whether the expected benefit of the repurchase justifies that trade-off while retaining enough liquidity to meet our financing obligations. We view repurchases as a capital allocation decision that must be weighed against other uses of capital. That same standard applies to each opportunity — the expected benefit to value per share after considering financing costs, liquidity and risks. We continue to see long-term opportunities in Ethereum and AI infrastructure through White Fiber. Our responsibility is to translate that opportunity into returns for Bit Digital shareholders. With that, let’s open the call for questions.

OPERATOR

Thank you. If you would like to ask a question, please signal by pressing star-one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow the signal to reach our equipment. Again, press star-one to ask a question. We’ll pause for just a moment to assemble the queue. We will take our first question from Nick Giles with B. Riley Securities.

Henry (Analyst at B. Riley Securities)

Thank you, operator, and good morning, everyone. This is Henry, filling in for Nick Giles. So, Sam, you highlighted the NAV discount and buybacks as a potential option through shareholder approval. But beyond repurchases, what other levers are you considering to help the market recognize the value of your underlying assets?

Samir Tabar (Chief Executive Officer)

Well, I think we’re one of the only ones in — if you look at what some people might refer to as our peers, we have an actual real business with very significant revenue. So we have a controlling majority stake in White Fiber, and that’s a lever that no other peers of Bit Digital has. And so I don’t think the market has really recognized that. And as White Fiber continues to show its execution ability, which it has, especially recently, we believe the markets will begin to provide shareholder value to White Fiber, which will cascade to Bit Digital.

So that’s one lever we have. Another lever we have is of course Ethereum going up. That should be helpful. Another lever that we have is White Fiber. At some point, potentially next year, we may sell down the shares and use that cash to buy Bit Digital shares. So that’s three levers that we have and we’re well positioned for that. But again, I understand the frustration. I own myself a lot of shares of Bit Digital, but I do see sunnier skies ahead, given the three levers that we just talked about.

Henry (Analyst at B. Riley Securities)

Understood, thank you for highlighting those three levers. And then you mentioned potentially selling that—

Samir Tabar (Chief Executive Officer)

The fourth lever is that we are vigorously looking at an alpha-oriented business that we’re developing in-house that will help us create some proper revenue under Bit Digital itself. So there’s a number of levers there. So those are the four levers.

Henry (Analyst at B. Riley Securities)

Got it. I was just going to ask, you mentioned selling down the potentially White Fiber stake in 2027 at this time. Could you say what your target stake in White Fiber might be? Or is this still something that you and management are working through?

Samir Tabar (Chief Executive Officer)

There’s no math around that. There’s no specific number. It really depends. We see the potential of White Fiber, we see what’s in the pipeline, so we’re in no rush to sell down the White Fiber shares. In fact, when we do so, if we do so next year, we will do that in a very measured manner in order to not put any selling pressure on White Fiber. But Bit Digital is in a good situation. It’s a capital-light business and currently we’re in pretty good shape.

So we don’t have any liquidity concerns on the Bit Digital side. However, should White Fiber — should the markets begin to credit White Fiber where credit is due, and the market cap of White Fiber goes to where we believe it should, then it would make a lot of sense to start selling down the shares of White Fiber and potentially using the cash to repurchase Bit Digital shares. But that’s what’s on the menu. And there’s nothing formulaic or structured about it. It will be a judgment call.

Henry (Analyst at B. Riley Securities)

Understood. Okay. Thanks for all the color, Sam, and continue. Best of luck.

Samir Tabar (Chief Executive Officer)

Thank you so much.

OPERATOR

We will take our next question from Kevin Deady with Jones Trading.

Kevin Deady (Analyst at Jones Trading)

Hi. Sam, I have some questions for you. Listen, I’m impressed with the way that you’re managing your ETH and helping to finance White Fiber, but I think the mechanics of it are a little over my head. I was wondering if you and Eric could kind of walk through how you’re looking at that and what the timeline having that ETH back at Bit Digital may be, then a follow-up for you too, please.

Samir Tabar (Chief Executive Officer)

Can you just rephrase the first question? I think that question’s for Eric, but I just want to make sure we understand it. Can you just say it again?

Kevin Deady (Analyst at Jones Trading)

Sure. Or, Eric, maybe if you already understand.

Eric Young (Chief Financial Officer)

I think Kevin’s asking about the digital bridge to White Fiber. Okay. Is that right, Kevin?

Kevin Deady (Analyst at Jones Trading)

Yes, absolutely right.

Eric Young (Chief Financial Officer)

Yeah, so it’s quite simple. We had converted our native staked ETH — we had taken it out and converted to the liquid staking ETH, so lsETH. By doing that, we’re not giving up the Ethereum staking rewards appreciation, and we use the lsETH as collateral and borrowed US dollars from Galaxy with a reported rate of 5.5% annualized. At the same time, we borrow that amount of US dollars to White Fiber through the bridge. We have set a 1.1 MOIC mechanism for 180 days.

So we’re looking to get those funds repaid back the second quarter of next year. And right now the facility sits at $100 million outstanding.

Kevin Deady (Analyst at Jones Trading)

Thanks, Eric. Appreciate it. The 5.5% that Galaxy is paid is paid by Bit Digital, and then is the loan that White Fiber has paid through some intercompany arrangement back to Bit Digital?

Eric Young (Chief Financial Officer)

Yes, it’s a bridge loan. The interest is 9.5% annualized with a 1.1 MOIC feature.

Kevin Deady (Analyst at Jones Trading)

Right, right. Okay. Then would you mind running through the balance of your ETH treasury strategy? How much do you intend to keep in native staking and what other alternatives might you consider in DeFi? And I’m wondering, you know, obviously, Sam, you alluded to alpha-oriented business. I’m wondering if DeFi is on the table for that.

Samir Tabar (Chief Executive Officer)

It is on the menu, absolutely. We can’t get too much into it. Eric is leading a particularly interesting business under the Bit Digital umbrella, but it needs a little bit more development. But it is an alpha-oriented business in that we’re not attached to cyclical market movements in generating revenue from that particular business that we have in mind. But I can’t get into it too much, and Eric is probably thinking right now that I’m already being a bit too open about it.

Kevin Deady (Analyst at Jones Trading)

You’ve overstepped your bounds maybe. Eric, just please offer a little more detail on your overall ETH management strategy. Just to refresh my memory, please.

Eric Young (Chief Financial Officer)

The ETH on balance sheet, we like to keep them 100% native staking unless there are better opportunities, like the bridge opportunities we have with White Fiber is a good example. That’s why we took some of that out of the native and turned to lsETH and borrow against that for advancing the bridge. Other than that, less than 10% is managed through some third-party funds that’s generating higher yield than native staking. As you probably know, native staking rewards had been decreased in the past few quarters — now it’s about 2.2% native staking — while we’re seeing those funds can generate suggested returns, 3% to 5% and above.

But with that being said, we like to maintain small portion for that allocation and majority of that as being native staked or more direct management by Bit Digital.

Kevin Deady (Analyst at Jones Trading)

Okay, thanks, Eric. I was gonna— I’ll ask you some more things about the native staking. You can remind me. I’ll hop back in the queue now. Thank you, gentlemen.

OPERATOR

Thank you. We will take our next question from Mike Colonnaise with H.C. Wainwright.

Mike Colonnaise (Analyst at H.C. Wainwright)

Hi, good morning, guys. Thank you for taking my questions. First one for me: assuming you do move forward with the share repurchase program, curious what discount to NAV would compel you to sell a portion of your ETH holdings to fund potential buybacks as you balance the trade-offs there.

Samir Tabar (Chief Executive Officer)

Yeah, there’s no actual formula. Eric, Charlie and I are thinking about it constantly. Eric, do you want to weigh in a little bit?

Eric Young (Chief Financial Officer)

Yeah, like Sam said, we’re still evaluating the situation. So in terms of selling ETH to do a repurchase, we’re still evaluating.

Samir Tabar (Chief Executive Officer)

Eric, do you want to take that? Sorry, can you rephrase your question again?

Eric Young (Chief Financial Officer)

Yeah, I think it’s still work in progress. Like Sam said, there are a number of alpha-driven opportunity businesses that we are developing and will provide more color when it’s more mature. But as of now, you know, the bridge strategy seems to be working well for us, you know, with the risk being assessed. Repeat that. I’m so sorry, there was a bit of an Internet connection issue. Yeah, it’s Eric. I will refrain from talking too much about it because I know it’s still quite—it’s very exciting but embryonic. It’s up to you if you want to provide some color since you’re leading that workstream. Or we could just wait until

Samir Tabar (Chief Executive Officer)

our next call. Yeah, I would refrain from commenting on that in details, but it’s some agents and businesses that Bit Digital and Web5 are working on, and we’ll provide more color, I believe, in Q1 next year.

OPERATOR

As a reminder, if you would like to ask a question, please press star one. We will take our next question from Brian Dobson with Clear Street.

Brian Dobson (Analyst at Clear Street)

Hey, good morning. Thanks for the additional details on those four levers of creating shareholder value. I suppose since a repurchase seems more complicated, as you’re thinking about allocating incremental dollars, what do you see as the best use for those marginal dollars? Is it that alpha-generation business that you alluded to?

Samir Tabar (Chief Executive Officer)

It could be. That’s one of the levers, certainly. I just want to take a step back. It’s complicated that we have many options, right? Of course we could sell our ETH or we could sell down our stake in White Fiber. So those are two levers to repurchase our. But the complication is really getting the shareholder authorization. And until we figure that out and decide where we’re going to get the funds to repurchase, that is really the complication. And that’s something we’re currently discussing and working on in terms of activating that process.

Brian Dobson (Analyst at Clear Street)

Great. Thanks very much for the color.

Samir Tabar (Chief Executive Officer)

Thank you.

OPERATOR

We will take a follow-up question from Kevin Deady with Jones Trading.

Kevin Deady (Analyst at Jones Trading)

Sorry to bug you, Eric, but can you remind me, is it Blockdaemon that’s handling your native staking, and is there any thinking behind maybe taking that in-house? And then I have a follow-up from the dog.

Eric Young (Chief Financial Officer)

It’s Figment that we’ve been working with for native staking for the past few years. And yeah, we had discussions about bringing that native staking in-house, but so far we’re pretty happy with their services. As you probably know, there are reporting requirements, controls requirements in place. As Figment’s providing this institutional level of service. We’re quite happy. Auditors happy. So, so far no change, but that’s definitely in consideration.

Kevin Deady (Analyst at Jones Trading)

Okay, so did you confirm Blockdaemon, or did you say Figment? I wasn’t sure—I missed that. Apologies. Yeah, Figment. Okay. Yeah. The dog wanted to know how much you have to pay for that service and how you’d recommend that we calculate it going forward.

Eric Young (Chief Financial Officer)

That’s for you. The service is based off a percentage, if I’m remembering correctly, 2.5% of the rewards, and a certain dollar amount per node that we operate on that I’m sure we’ve disclosed in the financials.

Kevin Deady (Analyst at Jones Trading)

Perfect. Okay. Thank you, gentlemen. Appreciate the time.

Samir Tabar (Chief Executive Officer)

Thank you, Kevin. Thanks, Kevin.

OPERATOR

There are no further questions at this time. I will turn the conference back to Mr. Tabar for any additional or closing remarks.

Samir Tabar (Chief Executive Officer)

Thank you very much for your time today and your patience. We’re working very hard towards increasing the share price. That is definitely our overriding concern as well. And we really do appreciate your patience. We’ll get there. Thank you.

OPERATOR

This concludes today’s call. Thank you for your participation. You may now disconnect.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.