Hut 8 Corp. · NASDAQ:HUT
Hut 8 — Investor Presentation (September 2024)
36 slides from Hut 8's investor presentation, September 2024
Slide 1: Building a next-generation energy infrastructure platform
Building a next-generation energy infrastructure platform INVESTOR PRESENTATION SEPTEMBER 2024
Slide 2: Cautionary Note Regarding Forward-Looking Information
Cautionary Note Regarding Forward–Looking Information This presentation includes “forward-looking information” and “forward-looking statements” within the meaning of Canadian These factors are not intended to represent a complete list of the factors that could affect Hut 8; however, these factors sh
Slide 3: Company overview
Company overview POWER-FIRST STRATEGY TECHNOLOGY AND INNOVATION VERTICALLY INTEGRATED PLATFORM SPEED AND CAPITAL EFFICIENCY DIVERSIFIED REVENUE STREAMS DISCIPLINED CAPITAL ALLOCATION 1,322 MW1 205 MW 1,000+ MW OWNED 2 AND MANAGED 3 CAPACITY CAPACITY CURRENTLY UNDER DEVELOPMENT PIPELINE ASSETS UNDER
Slide 4: We believe energy unlocks technological progress and human advancement
We believe energy unlocks technological progress and human advancement ENERGY CONSUMPTION VS. GDP PER CAPITA 100,000 ELECTRICITY CONSUMPTION PER CAPITA (kWh) Iceland Bahrain Norway Qatar United States Luxembourg 10,000 South Korea Saudi Arabia Japan Switzerland Russia Spain United Kingdom Portugal U
Slide 5: Key themes
Building a Key themes next-generation energy → We are capitalizing on a generational opportunity at the nexus of energy and technology infrastructure platform → We are redefining the paradigm for large-scale energy load resource development → We are building a vertically integrated platform that und
Slide 6: Capitalizing on a generational opportunity at the nexus of energy and technology
Capitalizing on a generational opportunity at the nexus of energy and technology Key market dynamics → SURGING DEMAND MARKET OPPORTUNITY Demand for energy and digital infrastructure continues to grow with US DATA CENTER ELECTRICITY CONSUMPTION the evolution of underlying technologies like Bitcoin mi
Slide 7: Redefining the paradigm for large-scale energy load resource development
We are redefining the paradigm for large-scale energy load resource development to power the technologies that advance humankind HISTORICAL Power sourcing is often a secondary Developing a scaled portfolio of power deployed on consideration in digital infrastructure projects an asset-by-asset basis
Slide 8: Our business is built on a platform of three interconnected layers
Our business is built on a platform of three interconnected layers 1 2 3 POWER DIGITAL INFRASTRUCTURE COMPUTE Operating system App store Apps Building and managing a scaled Designing, building, and operating Deploying compute to use cases with a focus portfolio of high-quality power assets purpose-b
Slide 9: Our power and digital infrastructure assets span geographies and end applications
Our power and digital infrastructure assets span geographies and end applications OWNED 1 ASSETS EXPANSION SITE 1 MEDICINE HAT SALT CREEK ALPHA DRUMHELLER 2 KELOWNA MISSISSAUGA VAUGHAN VANCOUVER II VANCOUVER I 205.0 MW 67.0 MW 63.0 MW 50.0 MW 42.0 MW 1.1 MW 0.9 MW 0.6 MW 0.5 MW 0.3 MW DEVELOPMENT BT
Slide 10: Our power and digital infrastructure assets in detail
Our power and digital infrastructure assets in detail BTC MANAGED POWER CAPACITY OWNER ASSET LOCATION POWER SOURCE SELF-MINING SERVICES HOSTING HPC SALES (MW) Expansion Site 11 Texas Panhandle Wind + ERCOT grid 205.0 Medicine Hat Medicine Hat, AB CCGT2 + AESO grid ✓ 67.0 Salt Creek Orla, TX ERCOT gr
Slide 11: Our platform underpins a diversified revenue stream
Our platform underpins a diversified revenue stream LAYER SEGMENT DESCRIPTION REVENUE SOURCE KEY METRICS: Q2 2024 MANAGED End-to-end project Multiyear partnerships: 582 MW $9.0M 65% POWER design, build, and NAMEPLATE REVENUE GROSS MARGIN SERVICES fixed fiat fee structure operations services CAPACITY
Slide 12: Our platform is diversified across the risk-return spectrum
Our platform is diversified across the risk-return Benefits of our spectrum diversified business → INVESTOR VALUE PROPOSITION ILLUSTRATIVE RISK-RETURN PROFILES Multiple access points for investors → DOWNSIDE RISK PROTECTION Compute Protection against market shifts in the compute layer INCREASING TAR
Slide 13: We have a track record of executing on our strategic priorities
We have a track record of executing on our strategic priorities PRIORITIES PERFORMANCE Focus on Expand margins by strengthening unit +12 pp -21% $0.032/kWh fundamentals economics and reducing overhead DIGITAL ASSETS MINING GROSS MARGIN GROWTH 1 QOQ ENERGY COST REDUCTION ENERGY COST Q2 2024 Disciplin
Slide 14: We take a disciplined approach to capital allocation and value creation
We take a disciplined approach to capital allocation and value creation WHAT SETS US APART → DOMAIN EXPERTISE AND CONNECTIVITY → DEEP, INCENTIVIZED BENCH → SHAREHOLDER ALIGNMENT Our leadership team and independent directors Our high bar for capital allocation and focus on Asher Genoot and Mike Ho ha
Slide 15: Our team has a track record of delivering outsized returns
Our team has a track record of delivering outsized returns RETURN ON $1 INVESTMENT DECEMBER 18, 2020 TO DECEMBER 4, 2023 (FIRST FULL DAY OF TRADING FOR NEW HUT 8) CEO Asher Genoot and CSO Michael Ho delivered Reflects stock price returns of nearly 7x to early investors in US Bitcoin performance prio
Slide 16: Extending our competitive advantages in energy, speed, and capital efficiency
We are extending our competitive advantages in energy, speed, and capital efficiency to fuel efficient, high-velocity growth 11 2 3 POWER POWER DIGITAL INFRASTRUCTURE COMPUTE → Continue to expand and convert multi- → Execute on buildout of scaled → Upgrade ASIC fleet through gigawatt development pip
Slide 17: Extending our competitive advantages: Power
Extending 1 our competitive POWER advantages to fuel efficient, high-velocity growth “Our aim is to maximize load capacity secured in our power layer for the long-term. What we do with that power to maximize returns across our digital infrastructure and compute layers will evolve over time as market
Slide 18: Expanding and converting our pipeline with an uncompromising bar for quality
1 POWER Expanding and converting our pipeline Our approach to with an uncompromising bar for quality portfolio development → SELECTIVE SCREENING DEVELOPMENT PIPELINE AND ILLUSTRATIVE PROJECTS Deep market connectivity and deal flow enable us to be highly selective while retaining significant volume a
Slide 19: Extending our competitive advantage in access to high-quality power assets
POWER 1 Extending our competitive advantage in Drivers of access access to high-quality power assets to new capacity → POWER-NATIVE TEAM ILLUSTRATIVE FRAMEWORK FOR SECURING NEW CAPACITY Critical understanding of regulatory regimes, commercial motivations, and SOLAR GENERATION WIND GENERATION enginee
Slide 20: Extending our competitive advantages: Digital Infrastructure
Extending 2 our competitive DIGITAL INFRASTRUCTURE advantages to fuel efficient, high-velocity growth “We are a power business, and we monetize our power on an asset-by-asset basis with a focus on driving the highest returns on any given project. In this way, our strategy mirrors the model of a priv
Slide 21: Leveraging BTC mining for capital turnover and transition optionality
2 DIGITAL INFRA Leveraging BTC mining for capital Strategic benefits turnover and transition optionality of Bitcoin mining → CAPITAL TURNOVER OUR VALUE CREATION MODEL Low cost and high velocity of Bitcoin mining buildout accelerates payback and drives strong unlevered returns Upside value can be cap
Slide 22: Setting the standard for rapid, cost-effective power deployment
2 DIGITAL INFRA Setting the standard for rapid, Drivers of speed and cost-effective power deployment capital efficiency → INTERNAL DEVELOPMENT OUR EPC ADVANTAGE: BITCOIN MINING INFRASTRUCTURE End-to-end EPC capabilities allow us to avoid the development or acquisition premium paid by peers to scale
Slide 23: HPC is in our DNA
2 DIGITAL INFRA HPC is in our DNA Segment highlights → ESTABLISHED OPERATIONS OUR HPC DNA Business segment established in 2021 with mature operations across five data centers and dedicated CAPABILITIES INFRASTRUCTURE team of 40+ today → VETERAN TEAM HPC segment leadership team with more than 10 deca
Slide 24: Specialized expertise to design, build, commercialize, and operate HPC data centers
2 DIGITAL INFRA We have the specialized expertise and capabilities required to design, build, commercialize, and operate HPC data centers 1 HUT 8 HPC TEAM CAPABILITIES AND EXPERIENCE → DESIGN AND CONSTRUCTION → DATA CENTER INFRASTRUCTURE MANAGEMENT (DCIM) Site selection and assessment (risk, environ
Slide 25: Partnering with Coatue to fund the development of our platform
2 DIGITAL INFRA Partnering with Coatue to fund the development of our next-generation energy infrastructure platform INVESTMENT HIGHLIGHTS $47B $2B+ $150 million STRATEGIC INVESTMENT TO FUND THE DEVELOPMENT OF ASSETS DEPLOYED TO GPU HUT 8’S NEXT-GEN ENERGY & AI INFRASTRUCTURE PLATFORM UNDER INFRASTR
Slide 26: Driving profitability with proprietary operating technology
2 DIGITAL INFRA Driving profitability with proprietary operating technology Reactor simulation overview → SUMMARY SIMULATED IMPACT OF REACTOR ENERGY CUTRAILTMENT Our simulation shows how our software can drive significant energy cost savings MONTHLY AVERAGE COST OF ENERGY PER MWH, CY 2023 1 ILLUSTRA
Slide 27: Extending our competitive advantages: Compute
Extending 3 our competitive COMPUTE advantages to fuel efficient, high-velocity growth “Today, we believe Bitcoin mining and AI compute generate the highest returns on large-scale load capacity and digital infrastructure. Given the scale of our power footprint and development pipeline, we are confid
Slide 28: Scaling our compute layer with a focus on disciplined capital allocation
3 COMPUTE Scaling our compute layer with a focus on disciplined capital allocation ASIC COMPUTE: FLEET UPGRADE AI COMPUTE: GPU-AS-A-SERVICE VERTICAL LAUNCH We are actively negotiating with manufacturers and project Our first cluster of 1,000 NVIDIA H100 GPUs is on track to go financing partners to u
Slide 29: Key themes
Building a Key themes next-generation energy → We are capitalizing on a generational opportunity at the nexus of energy and technology infrastructure platform → We are redefining the paradigm for large-scale energy load resource development → We are building a vertically integrated platform that und
Slide 30: Appendix
Appendix
Slide 31: Management team
Management team ASHER GENOOT MIKE HO SEAN GLENNAN VICTOR SEMAH CHIEF EXECUTIVE OFFICER CHIEF STRATEGY OFFICER CHIEF FINANCIAL OFFICER CHIEF LEGAL OFFICER – Co-founder of US Bitcoin Corp – Co-founder of US Bitcoin Corp and – Former Managing Director in the – Former CLO of global data center pioneer o
Slide 32: Independent directors
Independent directors BILL TAI, CHAIR JOSEPH FLINN STANLEY O’NEAL RICK RICKTERSEN MAYO SHATTUCK III AMY WILKINSON VENTURE CAPITAL, TECH FINANCE, SUPPLY CHAIN FINANCE, ENERGY PRIVATE EQUITY, TECH ENERGY, FINANCE PUBLIC POLICY – Venture capitalist – CFO of Seaboard – Former CEO and – Managing Partner
Slide 33: Q2 2024: Key metrics
Q2 2024: Key metrics METRIC Q2 2024 Q2 2023 COMMENTARY REVENUE $35.2M $20.5M 72% increase year-over-year, driven in part by growth in Managed Services BITCOIN MINED 1 279 740 9,102 Bitcoin on balance sheet at quarter-end, representing a market value of $570.5 million COST OF REVENUE $20.6M $12.0M Di
Slide 34: Q2 2024: Consolidated statement of income
Q2 2024: Consolidated statement of income Three Months Ended (in thousands) June 30, 2024 June 30, 2023 Revenue Digital Assets Mining $ 13,912 $ 15,858 Managed Services 9,017 4,672 High Performance Computing – Colocation and Cloud 3,365 — Other 8,921 0 Total revenue 35,215 20,530 Cost of revenue Cos
Slide 35: Q2 2024: Adjusted EBITDA reconciliation
Q2 2024: Adjusted EBITDA reconciliation ADJUSTED EBITDA RECONCILIATION NOTE ON ADJUSTED EBITDA Three Months Ended In addition to results determined in accordance with GAAP, Hut 8 relies on Adjusted EBITDA to evaluate its business, measure its performance, June 30, June 30, and make strategic decisio
Slide 36: Investor Relations
INVESTOR RELATIONS IR@HUT8.COM