Bitdeer Technologies GroupBTDRNASDAQ
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Operator: Good day, and welcome to the Bitdeer First Quarter 2025 Earnings Call. At this time, all participants are in listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Instructions will be given at that time. As a reminder, this call may be recorded. I would like to turn the call over to Yujia Zhai, Investor Relations Advisor. Please go ahead.
Yujia Zhai: Thank you, operator, and good morning. Welcome to Bitdeer's first quarter 2025 earnings conference call. Joining me today are Jihan Wu, Chairman and CEO; Matt Kong, Chief Business Officer; Haris Basit, Chief Strategy Officer; and Jeff LaBerge, Head of Capital Markets and Strategic Initiatives. Haris will begin today by providing a high-level overview of Bitdeer’s first quarter 2025 results and then cover the company's strategy and a detailed business update. After that, Jeff will cover Bitdeer's first quarter financial results in more detail and then we will open the call for questions. To accompany today's earnings call, we have provided a supplemental investor presentation. This presentation can be found on Bitdeer's Investor Relations website under Webcasts and Presentations. Before management begins their formal remarks, we would like to remind everyone that during today's call, we may make certain forward-looking statements. These statements are based on management's current expectations and are subject to risk and uncertainties, which may cause actual results to differ materially. For a more complete discussion on forward-looking statements and the risks and uncertainties related to Bitdeer's business, please refer to its filings with the SEC. Further, in addition to discussing results that are calculated in accordance with International Financial Reporting Standards or IFRS, we will also make references to certain non-IFRS financial measures such as adjusted EBITDA and adjusted profit or loss. For more detailed information on our non-IFRS financial measures, please refer to our earnings release that was published earlier today, which can be found on Bitdeer's Investor Relations website. Thank you. I will now turn the call over to Haris. Haris?
Haris Basit: Thank you, Yujia, and good day, everyone. Thanks for joining our first quarter 2025 earnings call. I'm excited to share the many developments happening at Bitdeer and walk you through the progress we've made since last quarter. Before diving in, I'd like to briefly highlight our Q1 financial results for which Jeff will provide more details in a few minutes. Starting on Slide 3, for Q1, total revenue was $70.1 million, gross profit was negative $3.2 million, and adjusted EBITDA was negative $56.1 million. The lower performance compared to Q1 last year was primarily driven by the impact of the 2024 halving higher global network hashrate, lower hosting and cloud mining revenue and higher R&D costs related to the one-off development and tape-out costs of our SEAL03 chip. These negative impacts were partially offset by higher average self-mining hashrate, which increased to 11.5 exahash per second at the end of the quarter as well as higher bitcoin prices. Over the past year, we have made the strategic decision to prioritize the development of our own ASIC technology. While this temporarily slowed our hashrate growth, it positioned us with long-term advantages that fundamentally differentiate our business. Producing our own machines enables us to scale at a significant cost advantage and maintain greater control over our growth trajectory. Now that our SEALMINERs are quickly coming off the production line, we expect a rapid acceleration in self-mining hashrate in the quarters ahead. In tandem, we are bringing online nearly 500 megawatts of new self-mining power capacity by mid-year, increasing our total global capacity to nearly 1.6 gigawatts. More than half of this power is located in Norway and Bhutan, our early focus on geographic diversification is now yielding results. Accordingly, in the near-term, we are prioritizing deployments of our A2 mining machines to Bhutan and Norway, which we expect will drive our self-mining hashrate to 40 exahash per second by October 2025. On the commercialization front, we are encouraged by the recent trade negotiations, which have led to a de-escalation in tariffs. Looking ahead, we expect U.S. tariff policies to encourage more Bitcoin mining-related manufacturing in the U.S. and anticipate a continued shift towards more balanced trade measures. We plan to migrate a portion of our manufacturing to the U.S. in the second half of 2025 and we'll share more details about this in future calls. Over the longer-term, we expect demand for Bitcoin mining rigs to continue rising. Having the most efficient chip will be essential to capture this multi-billion dollar TAM. Moving now to our ASIC roadmap, which is highlighted on Slide 5, of our supplemental presentation. Starting with SEALMINER A1, at the end of Q1, we completed the mass production of 3.7 exahash per second of our SEALMINER A1 mining rigs and finished installation and energization as of the end of April 2025. For SEALMINER A2, mass production of the previously announced 35 exahash per second remains on track to be completed in October 2025. As of the end of April, we completed manufacturing of 3.3 exahash per second of SEALMINER A2 mining rigs and 1.2 exahash per second were being assembled. Of the 3.3 exahash per second of completed miners, 1.3 exahash per second have been sold and shipped to external customers and 0.5 exahash per second have been deployed and energized at Bitdeer's data centers in Texas and Tydal, Norway, with the remaining in transit or being prepared for shipment. Additionally, at the end of Q1, we launched a pro series of our SEALMINER A2 mining rigs including both an air-cooled and hydrocooled model, both with an impressive power efficiency of 14.9 Joules per Terahash. For SEALMINER A3, we completed rigorous testing of several dozen of our prototype models in April and energy efficiency continues to meet our expectations. We have begun machine level testing and results are expected to be finalized by late Q2. We anticipate mass production for our SEALMINER A3 to commence Q3 of this year. Looking ahead to the second half of this year, our R&D efforts are now focused on our SEALMINER A4 project for which we are targeting an unprecedented efficiency of approximately 5 Joules per Terahash at the chip level. This chip has been completely redesigned from the ground up, leveraging a new digital architecture and technology that significantly improves energy efficiency. We believe this new chip design will revolutionize the way Bitcoin mining ASICs are made in the future. We have begun the process of filing patents on this technology and tape-out is on track for Q4 2025. We believe SEALMINER A4, along with our third generation chip, will position Bitdeer as the leading supplier of the world's most energy efficient mining rigs, significantly strengthening our market position and unlocking substantial value for our customers and shareholders. On Slide 6, of our supplemental investor presentation, we reiterate our prior guidance for our self-mining hashrate to reach approximately 40 exahash per second by Q4 of this year. Given the significant amount of power capacity we have coming online, our near-term plan is to prioritize our current ASIC production towards self-mining and utilize the bulk of our new power capacity in Tydal, Norway and Jigmeling, Bhutan. Please note that this forecast does not include anticipated additional wafer allocations for SEAL02 or for SEAL03. Depending on the exact manufacturing schedule and actual wafer allocations, our self-mining hashrate could be well above 40 exahash per second guidance by Q4 2025. Next, I'd like to provide a quick update of our energy infrastructure and pipeline that's highlighted on Slides 7 and 8 of our supplemental investor presentation. In early April, Bitdeer signed an SPA and a turnkey agreement for the acquisition and construction of a 50 megawatt mining data center in Ethiopia. The transaction includes a local company with a mining permit, a 33 kV substation interconnection and a four-year power purchase agreement with Ethiopian Electric Power Company. We are working closely with an EPC contractor that specializes in Bitcoin mining and are targeting energization by Q4 2025. This project reflects our continued commitment to identifying cost efficient sites that allow us to keep older generation machines online to maximize the ROI of our existing fleet. Additionally, in April, we energized 202 megawatts of data center capacity for self-mining, of which 70 megawatts was at our Tydal, Norway site and 132 megawatts in Jigmeling, Bhutan. We expect the remaining 105 megawatts in Tydal and 368 megawatts in Jigmeling to be energized by the end of June, bringing our total available power capacity to nearly 1.6 gigawatts. By the end of 2025, we are also on track to energize an additional 221 megawatts in Massillon, Ohio, and including our Ethiopia site, our total available power capacity will reach over 1.8 gigawatts. Finally, in April, due to advancing discussions with development partners and end users for HPC/AI, we made the strategic decision to pause Bitcoin mining-related construction at our 570 megawatt site in Clarington, Ohio. However, we maintain full optionality to reassess and resume the buildout for Bitcoin mining at a later date. In terms of our HPC/AI initiative, in March, we formalized an engagement with Northland Capital Markets to act as financial advisor for our HPC/AI data center development strategy. Northland has been assisting us in our negotiations with potential development partners in providing guidance regarding capital providers. As of May, we have advanced discussions with development partners and potential end users of selected large scale sites in the U.S. including our Clarington, Ohio site for HPC and AI. In summary, we have many exciting milestones on the horizon. We expect 2025 to be a pivotal year as our efforts start to bear fruit and we look forward to sharing updates on our progress. I'll now turn it over to Jeff LaBerge, our Head of Capital Markets and Strategic Initiatives, to go over our financial results for the quarter.
Jeff LaBerge: Thank you, Haris. Before I go over Bitdeer's first quarter financial results, I'd like to remind everyone that all figures I refer to today are in U.S. dollars and that all comparisons are to Q1 of last year. Q1 consolidated revenue was $70.1 million versus $119.5 million. Self-mining revenue was $37.2 million, down 23.1% primarily due to the April 24 halving event and an increase in global network hashrate partially offset by higher self-mining hashrate and higher bitcoin prices. Cloud hashrate revenue was $0.1 million versus $18.1 million. This decline was due to the expiration of long-term cloud hashrate contracts and the subsequent reallocation of the hashrate to our self-mining operations. General Hosting revenue was $9.6 million versus $29 million. Membership Hosting revenue was $16.3 million versus $19.5 million. SEALMINER sales revenue in Q1 was $4.1 million. The decrease in Hosting revenue was mainly caused by two factors. First, we converted 100 megawatts of Hosting capacity at our Texas facility to hydro cooling capacity, which is expected to be renovated and equipped with SEALMINER hydrocooled mining rigs that begin phasing in during the first quarter of 2025. Second, some Hosting customers removed less efficient miners after the halving in April 2024. Some of this extra capacity is currently being replenished by new hosted mining rigs. Total gross profit for the quarter was negative $3.2 million versus positive $34.1 million and gross margin was negative 4.6% versus 28.6%. The decrease in our gross margin was primarily driven by April 2024 halving events, impact on our self-mining and lower hosting and cloud hashrate revenues. Total operating expenses for the quarter were $75.8 million and $37.8 million. The increase was primarily driven by higher R&D costs related to the one-off tape-out costs for SEALMINER 03, higher engineering costs related to the company's ASIC development roadmap, and non-cash amortization expenses of intangible assets related to the acquisition of FreeChain in Q4 2024. Other operating expenses were $7.8 million due primarily to non-cash impairment of Bitcoin. As a reminder, under IFRS Bitcoin is classified as an intangible asset and is measured at cost less any accumulated impairment losses with no subsequent revaluation permitted. Other net gain for the quarter was $503.1 million versus $2.4 million. The net gain was due to the non-cash derivative gains on the convertible bonds issued in August 2024 and November 2024 and the Tether warrants, which I will discuss in more detail in the liability section. IFRS net profit was $409.5 million and $0.6 million. Adjusted profit was negative $89.8 million versus positive $9.7 million. Adjusted EBITDA was negative $56.1 million versus positive $27.3 million. This quarter's low performance compared to Q1 last year was primarily driven by the impact of the 2024 halving higher global network hashrate, lower hosting and cloud mining revenue, higher R&D costs as described previously. These negative impacts were partially offset by higher average self-mining hashrate and higher Bitcoin prices for the quarter. Net cash used for operating activities was $284 million, predominantly driven by SEALMINERs, supply chain and manufacturing. Net cash used for investing activities was $73.6 million, including $45.7 million of capital expenditures for infrastructure construction and mining rigs, $18.2 million for the purchase of cryptocurrencies, $21.9 million to acquire the site and gas-fired power project in Alberta, and $12.3 million of proceeds from disposal of cryptocurrencies from the principal business. Net cash generated from financing activities for the quarter was $94.9 million, which resulted primarily from the $118.4 million of net proceeds from issuance of shares under our ATM facility in January and February, offset by $21 million used for share repurchases. Moving on to our 2025 Bitcoin mining infrastructure spending, we expect CapEx for the continued buildup of our global power and data center infrastructure to now be in the range of approximately $260 million to $290 million for calendar year 2025. This update includes reported infrastructure CapEx in Q1. The reduction from our prior guidance is due to approximately $80 million in savings for the pause of Bitcoin mining infrastructure construction at our Clarington, Ohio, site that Haris spoke about earlier. Please note that this guidance only factors in power and data center spend for Bitcoin mining and does not include CapEx for SEALMINERs used for self-mining. In terms of our balance sheet, we ended the quarter in a strong financial position with $215.6 million in cash and cash equivalents, $131.1 million in cryptocurrencies and $215.4 million in borrowing excluding derivative liabilities. Derivative liabilities were $256.8 million, which related to the Tether warrants and August 2024 and November 2024 convertible notes representing a $507.2 million decline compared to our last quarter. Again, this is a non-cash fair value adjustment driven by the decline in our stock price and does not impact our liquidity or operations. Under IFRS, certain derivative instruments, such as warrants and convertible debt are required to be revalued at fair market value each reported period. As our stock price increases, the fair value of these instruments rise, resulting in a higher reported liability and vice versa. The recorded liability will ultimately be netted at settlements either upon conversion to equity or expiration, and does not represent an actual cash outflow. In April 2025, we entered into a loan agreement with Matrix Finance and Technology Holding Company for a financing facility of up to $200 million. The loans drawn under the facility bear a variable interest rate of 90% plus a market-based reference rate. Each drawdown is repayable in fixed monthly installments over 24 months and is secured by the pledge of SEALMINERs. As of today 2025, we have drawn approximately $90 million under this facility. Finally, regarding our outstanding ATM facility, since the middle of February 2025, we have not sold any additional shares given the broader market correction. Thank you, everyone. That concludes the prepared remarks section of our earnings call. Operator, please open the call for questions.
Operator: Thank you. [Operator Instructions]. Our first question comes from Darren Aftahi with ROTH. Your line is open.
Darren Aftahi: Hey guys, good morning. Thanks for taking my questions and nice to see all the progress. A couple things, first, I know in the past you guys talked about third-party interest in A2 and I think it was maybe in the 7 exahash range. And then you guys kind of talked earlier this year about taking that in-house for your own self-mining. I'm just kind of curious, obviously, the world is moving pretty fast but how has interest in, maybe this is not the A2 but your chips in general change maybe in the last few weeks. Is there as much third-party interest? Has that demand changed since you kind of said you would bring that in-house? And then, my second question is on your 40 exahash target by the end of the year. You -- Haris talked about there could be upside to that. I guess, what is under consideration in terms of that target? Is it simply machines and available power or is there something more nuanced there? Thank you.
Haris Basit: I will take this question. Generally, we feel that the desire for purchasing mining ASICs from us has increased significantly after the Bitcoin price increasing. That's very natural. So you can see that we moved some sales of the Bitcoin mining rate, but anyway we -- our priorities are still self-mining. We want to fulfill our Bitcoin mining farm that is going to build up within this year. And the second question is that the upside of our target, well, due to the current trading situation, there is lots of uncertainty over the availability of the capacity because everyone may want to have more capacity of the TSMC and to have inventory and maybe some of them may give up. We don't know what the decision and their prediction will be, but we always have strong confidence over TSMC as our capacity and technology partner and we are communicating with them. So I think we can at least guarantee the previous target [indiscernible].
Darren Aftahi: Great. Thank you.
Operator: Thank you. Our next question comes from Ben Summers with BTIG. Your line is open.
Ben Summers: Hey, good morning, guys, and thanks for taking my question. So first around the decision to pause Bitcoin mining development at Clarington. Kind of just any color on the type of customers we're hearing from here and where are we seeing the strong demand for the site?
Haris Basit: Okay. I can maybe answer that question. So at this point in time, we are -- we are getting some inbound from potential end users or tenants. But our primary work here really is to get a development partner that we can work with to develop this site. And so they have very strong connections, the people we're talking to all the hyperscalers. And we are not in that stage yet where we're actively pursuing the hyperscalers at the moment. So we are getting some inbound, sort of natural inbound requests at this time. The main focus remains on closing a deal with the development partner.
Ben Summers: Got it. Super helpful. And then kind of on the recent loan agreement that we entered, I guess just why now? And then how are we kind of thinking about the capital structure moving forward here and maybe how are we thinking about managing the Bitcoin balance on the balance sheet as we continue to expand the business?
Jeff LaBerge: Jihan, do you want to take that or you'd love me to. I can touch on that. So, yes, we feel right now, again, with a broader correction in the market, we stopped using the ATM in February when the price dropped quite significantly. So we've always been very conscious of dilution in our -- as far as our capital raising process. And we feel that the business can be -- can take on a certain amount of debt to finance, especially on the mining rig side where we have a certain payback potential opportunity for the use of proceeds. So we felt like a responsible, reasonable amount of debt could be utilized to finance the chip purchases.
Ben Summers: Awesome. Thank you guys for taking my questions.
Operator: Thank you. Our next question comes from Kevin Cassidy with Rosenblatt Securities. Your line is open.
Kevin Cassidy: Hi, thanks for taking my question and congratulations on the great progress. The SEAL A4 ASIC that you're going for the fourth quarter and then when you'll have the SEALMINER A4 out, what would be the strategy for that? It seems like that's going to be a very high demand device equipment for other miners. Are you going to stay with mostly internal or will there be enough capacity to sell externally and use it internally?
Haris Basit: So as we fill up our existing capacity with A2s and then some A3s, we will naturally transition to more external sales. And so A4, if we tape-out as we expect in Q4, the machines won't be ready for at least a couple of quarters after that or maybe even a little longer in mass production. So by that time I expect, but we won't know for certain that largely we will be selling externally because our internal capacity should be close to full. And if we get as much capacity from TSMC as we hope, we should be able to have significant external sales.
Kevin Cassidy: Okay. Great. And that does ask the question or how does the transition work from like if you go from the SEALMINER A2 to A3, does A3 expect that to keep that in production for another year or so after A4 is out?
Haris Basit: A4 still not taped out yet. If A4 taped out and we got by the chip, I believe that will be at the end of the year and to get to the status of mass production ready. And after that I think A3 and A4 will coexist for quite a long time because A3 will be, I think the cost in terms of a dollar per Terahash will be lower than A4. So it will be -- it will depend on different situations, which mining racks, users and us want to choose from. And it will also depends on other factors. If we have a really abundant capacity, I think A4 can be a preference. But if the total capacity we can obtained from TSMC is limited, I think A3 maybe actually is better because it can yield much more hashrate out from the wafers.
Kevin Cassidy: Okay. Great. It's good to have those options. Thanks.
Operator: Thank you. Our next question comes from Nick Giles with B. Riley Securities. Your line is open.
Nick Giles: Thanks, operator. Good morning, everyone. Guys, apologies if I missed this, but it looks like electricity costs were slightly higher in 1Q. Assume this was on some of the extreme weather earlier in the year, but can you just touch on how power costs could trend from here?
Jeff LaBerge: Yes. So Q1 historically has been our highest power price for throughout the year. It's primarily due to a couple things. So number one, in Bhutan, we have a nine-month PPA at around $0.04 and $0.0425 per kilowatt hour that runs between Q2 and Q4. Q1 is a dry season in Bhutan. So during that quarter, we typically procure power from the Indian market. We are looking into options, power purchase agreements and other forward power pricing opportunities to fulfill that moving forward. We were not able to get that in place in time for Q1, so prices in Bhutan were elevated. Aside from that, Rockdale had slightly elevated prices just historically. So that was a -- that led primarily to the recent power price for the Q1. Moving forward, Q2 and Q3 are typically lower cost quarters for us. We are implementing a much more aggressive power supply strategy and we expect some of those to start bearing fruit in this next quarter, possibly Q3.
Nick Giles: Thanks for that. That's very helpful. My second question is clearly your ASIC machines have the opportunity to be as a leading edge but it's been too early for analysts to ultimately track performance and utilization. So what would you consider the first opportunity for the market to see really just the overall efficiency of your fleet, specifically on some of the later generations?
Haris Basit: Even though we are hungry for the machines in our own mining farm, we are still squeezing some of our capacity to customers. That's for them to test and try. And right now so far so good, I think we are already see how good our machine are, have a strong confidence over that and that's about A2 and A4. A3 will be able to ship to our customers in October. So the earliest day customers can test A3s in October.
Nick Giles: Got it, guys. Appreciate all the color. Best of luck.
Operator: Thank you. Our next question comes from John Todaro with Needham. Your line is open.
John Todaro: Hey guys, thanks for taking my question. Congrats on the progress. First question, I guess, just trying to understand where we should be targeting average fleet efficiency. Obviously, some of these rollouts are going to lower that efficiency quite a bit. Just wondering for kind of like, second half of 2025, and then, 2026, what that average roughly would be? And then I have a follow-up question on the HPC.
Jeff LaBerge: Yes. So John, I'll take that. So with our -- obviously our average move down from last quarter is probably in the high-20s at this point down from 31-ish been sort of historically from our legacy fleet. As we get to approach that 40 exahash range, we should be down in the lower-20s in the 22 to 24 Joules per Terahash range. That's assuming we keep all of our existing hashrate online, which currently we're planning to do. Eventually, obviously, we will start phasing out some of the older rigs. Some of those can be moved to lower cost power regions like Ethiopia, possibly Canada in the future. But as those start to be phased out or diluted by newer -- some of our newer generation rigs, we would expect that efficiency to drop into those -- into the teams.
John Todaro: That's helpful. And then on HPC, it sounds like with a development partner you would look to do a powered shell or maybe even full stack. But I noticed, Massillon wasn't paused, Clarington was. Do you still think both sites could be for HPC or are we going to focus on Massillon for Bitcoin mining and then the 266 megawatts of Clarington for HPC?
Haris Basit: So the focus is on Clarington right now. And it's not just the first 266 megawatts. It's the entire 570 megawatts that are there in Clarington. Massillon, we are moving ahead right now with Bitcoin mining at that location.
John Todaro: Got it. Okay. Great. Thank you. Appreciate it guys.
Operator: Thank you. Our next question comes from Brett Knoblauch with Cantor Fitzgerald. Your line is open.
Brett Knoblauch: Hey guys, thanks for taking my question. Maybe just on the ASIC side, I know before I think you guys said, you were going to be allocating somewhere around 7 exahash to external sales. Should we still be expecting 7 exahash of sales for this year? And of the $4.1 million of ASIC sale revenue this year, was that related or this quarter, was that related to 1.3 exahash that was shipped?
Haris Basit: I'm going to ask Jihan to answer that about the amount of sales that we're going to allocate for this year.
Jihan Wu: Well, this is quite a dynamic decision. Actually the process, the real process is that I approval the application from the sales email by email. Generally, I want to deploy to our mining farm and do self-mining and it highly depends on the customers and whether we are genuinely want them to have interest and a real test for mining rigs. So I cannot really get you a very precise prediction about our decisions.
Brett Knoblauch: And then, just on the sale or the ASIC revenue from this quarter is that coming from the 1.3 that was shipped?
Haris Basit: Correct. Yes. So that's a portion of that that was recognized in the quarter. Some additional may be recognized in Q2.
Brett Knoblauch: And should we still be expecting a average selling price somewhere around $15 a tariffs?
Haris Basit: Jihan, there's going to be no change in the pricing. I don't believe so.
Jihan Wu: Well, due to the competition as a market, we will need to provide competitive price to our customers. And the most recent pricing tag is $12.8 per exahash, if I remember it correctly. And for A2 and A2 Pro, we will just follow the market dynamics. If competitors lower the price, I think we will follow-up. Anyway, our quantity of the sales is limited. We don't fail to join any price competitions at this point of time.
Brett Knoblauch: Perfectly understood. And then, on the self-mining growth, I thought I heard that you guys were expecting 40 exahash by October. Is it by October or by end of the year?
Haris Basit: It's by October.
Brett Knoblauch: By October. Okay. Awesome. Really appreciate it guys. Thanks.
Haris Basit: Thank you.
Operator: Thank you. Our next question comes from Mike Grondahl with Northland. Your line is open.
Mike Grondahl: Hey guys, thank you. Two questions. One, your lowered CapEx guidance $260 million to $290 million. Could you kind of highlight where that's going this year? And then, secondly, if you could just provide a little bit more detail on that SEALMINER loan facility. Is that for the chips, inventory, financing, finished goods, just kind of help us understand mechanically how that'll work.
Jeff LaBerge: Yes. Sure. Mike, I can take that first part. So the CapEx is primarily is related to the finishing of the Tydal, Norway site and the Jigmeling site as well as our Massillon, Ohio, site. So between those three is about $120 million. And we also have budget in there for finishing up Texas and some for Canada and the small amount of the Ethiopia project. And again that the $260 million is really for the entire year. So what I just put there was sort of the remaining amount, maybe $190 million left for the rest of the year. And sorry, what was the second question, Mike?
Mike Grondahl: The SEALMINER loan facility you talked about that you recently put in place. Just mechanically, how does that work? Is it on chips, inventory, finished goods?
Jeff LaBerge: Yes. So it's to be used to finance the purchase of chips and then the loan itself is going to be secured by the chips all the way through to the end SEALMINER.
Mike Grondahl: Got it. So those miners are kind of acting as collateral kind of presale if you will.
Jeff LaBerge: Correct or for in this case self-mining use.
Mike Grondahl: Got it. Okay. Thank you.
Operator: Thank you. Our next question comes from Brian Kinstlinger from Alliance Global Partners. Your line is open.
Brian Kinstlinger: Great. Thanks so much. I'm curious at what level of tariffs would Bitdeer's decision to sell externally alter the strategy right now of timing is 30% something you're comfortable with especially if semiconductors don't get reprieved. Just curious how that might impact your decision, if 30% is the number.
Jihan Wu: The tariffs we believe in the end, it will be quite reasonable. I don't think this negotiation skills will be the ultimate tariff policy for the U.S. government. And it's very important that the chips produced by Taiwan, I don't think it will be put at high tariffs. So we have lots of ways to make our business viable even inside the United States. For example, we can ship the chips into United States and doing a sample in United States. That's a possible solution we're evaluating right now. And secondly, we have capacity overseas in Norway, in Bhutan, Ethiopia as well. And there are low tariffs for such kind of products as well. So we can do our self-mining there. I think generally tariffs will make more economic activity on the U.S. soil but of course, it's not for efficiency and prosperity. It's more for self-sufficient national security and more for creating jobs inside. So I think everyone including us has to compromise a little bit. But generally I think especially in the early years, I think it will be okay.
Brian Kinstlinger: Great. A follow-up I have in terms of demand and you guys have taken deposits. What percentage of that comes outside of the United States in the demand for ASICS, roughly if you could?
Jihan Wu: Mostly right now are from United States.
Brian Kinstlinger: Great. Thank you.
Operator: Thank you. [Operator Instructions]. Our next question comes from Bill Papanastasiou with KBW. Your line is open.
Bill Papanastasiou: Good morning, gentlemen, and congrats on all the progress. Just a quick question for me here. As a follow-up to that prior tariff question, perhaps you can speak to how customer interest has trended recently for the upcoming SEALMINERs. We've seen a number of Bitcoin mining companies pull back, capital expenditure for Bitcoin mining. Furthermore, have you seen any shift in the composition of interest from North America to the rest of the world following the recent tariff landscape? And could you see -- do you think you could see a larger portion of customer sales in the future coming from that rest of world component. Thank you.
Jihan Wu: Well, on one side U.S. based Bitcoin miners have the best capital market in the world. They have the capability to raise up capital to expand their operations. I don't think this will change in the near future. But at the same time, dilutions can be a little bit unwelcomed in the market. That's what I perceived from those reviews and remarks. So I think U.S. based Bitcoin miners will start to find a way to expand their operations without dilute the share base [indiscernible] basically grow fastly. I think that means there's leverage but still leverage, they will need to have confidence about future revenues with certain kinds of management effects involves lots of different problems all I did the capacity. So kind of a transparency from the mining rigs suppliers will be demanded, which we are -- which Bitdeer cannot work out alone. So I think generally, we are confident because U.S. got very upon energy, very good capital market and the culture of entrepreneurship to expand their business. The total hashrate market share resides in Southern United States; I think will continue to grow from here roughly 30% maybe to even higher. But I think it will take very slow time. It will not increase as fast as past. U.S. has increased from nearly zero or very minimum hashrate percentage to 30%. That's remarkable progress. I think it will -- the growth of market share of the United States will continue, but it will, [indiscernible]. Yes. I'm not sure I answered your question or not.
Bill Papanastasiou: No. That's great color. And then maybe as a follow-up to that, we've seen a number of miners enter into ASIC option, payment structures, in order to acquire an incremental amount of capacity. Is there any thought in terms of trying to entertain a similar type of structure at Bitdeer for the A4s or A3s down the road?
Jihan Wu: You mean we buy the credit to our clients?
Bill Papanastasiou: Yes, essentially, yes.
Jihan Wu: Generally, we don't have the plan now [Technical Difficulty] access to market capital in the market with a very good financing. So obviously, we'll be working with partners to financial to solve this kind of problem. I think it's much more help there then Bitdeer itself to provide such kind of a credit. Because lots of bad stories in the financial or business case, you start to provide such kind of credit to a client on such kind of capital goods by yourself, it may distort the economic signal a lot.
Bill Papanastasiou: Appreciate the color. Thank you so much.
Operator: Thank you. I'm showing no further questions at this time. This does conclude the question-and-answer session and you may now disconnect. Everyone, have a great day.
Haris Basit: Thank you.