NEW YORK - Bit Digital, Inc. (NASDAQ:BTBT), a company specializing in digital assets and artificial intelligence (AI) infrastructure, announced today that it has received a proposal from a current customer to expand their existing agreement. The expansion involves the addition of 2,048 Graphics Processing Units (GPUs), doubling the total to 4,096 GPUs under the proposed amended agreement. This move is expected to significantly enhance Bit Digital's AI business segment, potentially leading to an annualized revenue run-rate of $100 million.
The company, which conducts bitcoin mining operations across the United States, Canada, and Iceland, also provides infrastructure services for AI applications through its business line Bit Digital AI. The proposed expansion is subject to negotiations over specific terms and conditions. Once finalized, the agreement is poised to represent a substantial growth milestone for Bit Digital's AI infrastructure services.
Bit Digital's CEO, Sam Tabar, expressed enthusiasm about the development, stating, "This further commitment from our customer is a testament to our execution in rapidly supplying them with mission-critical GPU capacity." He emphasized the company's commitment to meeting current customer needs and attracting new clients as part of their strategy to scale the AI business line quickly.
Investors are advised to consider the inherent risks associated with the company's securities. The "Risk Factors" detailed in Bit Digital's Annual Report on Form 20-F for the fiscal year ended December 31, 2023, outline potential challenges that could impact the company's business, financial condition, or operational results. It's important to note that past financial performance is not necessarily indicative of future results, and various factors, including changes in network-wide mining difficulty rate or bitcoin hash rate, could affect Bit Digital's bitcoin production performance.
InvestingPro Insights
As Bit Digital, Inc. (NASDAQ:BTBT) gears up for a potential expansion of its AI infrastructure services, investors may find the following real-time data and InvestingPro Tips from InvestingPro particularly illuminating:
The company's market capitalization stands at a modest $244.63 million, and despite a challenging past performance with a negative P/E ratio of -14.56 over the last twelve months as of Q4 2023, Bit Digital's revenue growth has been notable. The company experienced a substantial quarterly revenue growth of 106.43% in Q4 2023, suggesting a significant uptick in business activity. Additionally, the gross profit margin was 34.2% during the same period, which may indicate a solid underlying business model capable of generating profit from its revenues.
InvestingPro Tips highlight that Bit Digital holds more cash than debt on its balance sheet, which could provide financial flexibility for the proposed expansion. Moreover, analysts are optimistic about the company's future, predicting sales growth and net income growth in the current year. These insights could be crucial for investors considering the company's potential for scaling its AI business line.
However, it's worth noting that Bit Digital has been quickly burning through cash and does not pay a dividend to shareholders. The stock has also been characterized by high price volatility, with significant returns over the last week but a poor performance over the last month and three months.
For those interested in a deeper dive into Bit Digital's financial health and future prospects, InvestingPro offers additional tips. By using the coupon code PRONEWS24, readers can get an extra 10% off a yearly or biyearly Pro and Pro+ subscription. There are 14 more InvestingPro Tips available that could help investors make more informed decisions.
Lastly, with the company's next earnings date scheduled for April 25, 2024, investors will soon have an opportunity to assess Bit Digital's recent performance and management's commentary on the expansion's progress and its impact on the company's financial trajectory.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.