Soluna Holdings, Inc. · NASDAQ:SLNH
Soluna — Earnings Presentation (September 2022)
72 slides from Soluna's earnings presentation, Sep 23, 2022
Slide 1: Soluna Computing Flash Update, August 2022 Results
1 HOLDINGS COMPUTING August 2022 Flash September 2022
Slide 2: Preamble
2 Preamble The following discussion is completely qualified by the legal disclosures on the several pages following this one Our goal is to share with you some of our strategic thinking and financial analysis we are using to guide the growth of our business The discussion is in line with our princip
Slide 3: Legal Disclosure & Disclaimer
3 Legal Disclosure & Disclaimer This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act that reflect our current views with respect to, among other things, our operations, business strategy, interpretation of prior development activiti
Slide 4: Legal Disclosure & Disclaimer
4 Legal Disclosure & Disclaimer The material in this presentation has been prepared by Soluna and is general background information about Soluna’s activities, current as at the date of this presentation and is provided for information purposes only. It should be read in conjunction with Soluna’s per
Slide 5: Legal Disclosure & Disclaimer: Use of Projections and Illustrations
5 Legal Disclosure & Disclaimer Use of Projections and Illustrations This presentation contains certain financial forecasts and illustrations. Neither Soluna’s [nor Soluna Holdings] independent auditors have studied, reviewed, compiled or performed any procedures with respect to the projections for
Slide 6: Key Operating Principles
6 Key Operating Principles (1) Calculated as a percent of total undiluted shares 25%(1)
Slide 7: Batch-oriented computing using excess renewable energy
7 Batch-oriented Computing like cryptocurrency mining Excess energy from renewable sources We buy curtailed energy from renewable power plants and convert it to clean, low-cost global computing. 7
Slide 8: The opportunity beyond crypto is Batchable Computing
8 The opportunity beyond crypto is Batchable Computing Digital currencies $10B Pharma research $5B Graphics/video processing $40B Scientific research $40B
Slide 9: Agenda
9 Agenda Business Update In this presentation, we will be covering the following items: Flash August 2022 Results
Slide 10: Business Update
10 Business Updateib
Slide 11: Engineered to thrive in a BTC downturn
11 Engineered to thrive in a BTC downturn Right company Right plan for volatile environment
Slide 12: Soluna Status Report
12 Soluna Status Report Dorothy 50MW o Construction is nearly complete – ~$5 million of capex remaining, a portion of which will be funded by Spring Lane o Awaiting ERCOT approval – active discussions to assess potential gating items o 50MW doubles Soluna’s operating footprint Focus on Liquidity to
Slide 13: What Could Turning on Dorothy Do for Financial Results?
13 Dorothy 1A 25MW Dorothy 1B 25MW Spring Lane (32% Owner) 100% Owner 100% Hosting 50% / 50% 100% Prop 100% Hosting 50% / 50% 100% Prop Cash Inflows 1,139 1,364 1,588 1,139 1,364 1,588 (-) Power Costs (630) (630) (630) (630) (630) (630) Cash Contribution Margin 509 734 958 509 734 958 % Contribution
Slide 14: Dorothy Gives Us Scale
14 Dorothy Gives Us Scale 67% 67% 62% 56% 51% 48% 36% 35% 33% 28% 15% 8% IREN BTBT CORZ SLNH (w/o Dorothy) MARA MIGI CLSK GREE SLNH (w/ Dorothy) HUT RIOT HIVE SG&A as a % of Sales (Q2 2022) Increased SG&A to Support Growth from Dorothy – Energization Normalizes SG&A Levels * Based on latest fiscal y
Slide 15: Adjustments to Support Dorothy Buildout
15 Capital structure contemplated Dorothy energization at the end of Q2 As a result of BTC declines, power cost increases, and ERCOT-related Dorothy energization delays adjustments have been necessary Rescheduled noteholder maturity to better match maturity with Dorothy earnings ramp Convertible not
Slide 16: Sale of GPU Miners from Project Edith
16 Soluna’s first facility Beta test for the value of Soluna facilities to maximize grid flexibility First-hand experience drove proprietary data center design and green energy enablement thesis Crystallizes ability to deliver robust project level ROIC Delivered ~3.5x ROIC over the course of Soluna’
Slide 17: Edith: Strong Return On Capital Investment
17 $104 $666 $707 $579 $570 $310 $201 $26 $29 $500 $290 $945 $193 ($841) ($368) $1,467 $1,610 $1,636 $1,665 $2,165 $2,455 FY 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22A Q2 22A Jul 22E Aug 22E Sept. 22E Mar 23E EBITDA Contribution CapEx Cumulative CF Edith: Strong Return On Capital Investment All Capital Retur
Slide 18: Marie Hosting Contract Historical Results
18 Marie Hosting Contract Historical Results $ in (000's) Q3 21 Q4 21 Q1 22 Q2 22 Jul 22 Total Revenue 349 1,729 1,452 1,179 353 5,062 (-) Electricity/Direct Costs (184) (890) (1,086) (975) (443) (3,579) Cash Contribution Margin 166 839 366 203 (90) 1,483 % Margin 47% 49% 25% 17% -26% 29% (-) Rent*
Slide 19: Hosting Update – Improved Terms
19 Hosting Update – Improved Terms Hosting Operations to Date Renewal of Hosting Contract • Structured prior to moves in power markets and Bitcoin price • Fixed fee + profit share • Economics became challenged as Bitcoin prices declined and power costs increased * Excludes Navier contract, excludes
Slide 20: Power Cost Update
20 Power Cost Update FUEL COST ADJUSTMENT (“FCA”) PERCENT CHANGE RELATIVE TO JUNE FCA FCA has averaged 1.5 cents - 2.0 cents per kWh for the last seven years ; the FCA in July and August were at unprecedented levels* − July: 3.873 − August: 4.491 September FCA of 2.843 cents per kWh represents a 37%
Slide 21: Illustrative Normalized Cash Contribution Margin
21 August Revenue $2,447 (-) June Electricity / Direct Costs with 5% Increase (1,257) (-) August Overhead Costs (313) August Cash Contribution Margins Normalized to June FCA Levels $877 Implied % Margin 36% Implied Impact $464 Reference: August Avg. MW Deployed 33.8 June Avg. MW Deployed 34.2 Septem
Slide 22: Facility Results Review
22 We will review each facility Then look at the consolidated results Facility Results Review
Slide 23: August Business Summary
23 August Business Summary Flat BTC Production Despite Volatile Market o BTC equivalent mined increased 6% despite average BTC prices increasing only 4% from July to August o Peak hashrate remained above 1 EH/s Cash Contribution Margins Remain Healthy o 20% Consolidated cash contribution margins des
Slide 24: Path to 2.5 EH/s Scale
24 Path to 2.5 EH/s Scale Anticipating Energizing Q4 2022 Subject to Project Finance Process + Ercot 198 277 255 252 257 235 215 288 265 263 250 280 280 280 126 312 364 439 452 519 608 604 613 606 737 737 1,537 800 800 316 403 567 616 696 714 733 897 869 876 856 1,016 1,816 2,616 Oct 2021 Nov 2021 D
Slide 25: Sophie
25 Sophie Average August PH/s increased by 3% to 381.74 PH/s versus July PH/S of 371.53 o Ramp up of installed machines continues Adjusted Cash Contribution Margin (Non-GAAP) in August was $353 thousand versus $366 thousand in July o The decrease in 4% of margin was largely due to an increase in ene
Slide 26: Sophie: Non-GAAP Historical Financials
26 Sophie: Non-GAAP Historical Financials For more information on these non-GAAP financial measures, please see the section captioned “Reconciliation of non-GAAP results of operations to the nearest comparable GAAP measures”. To supplement our consolidated financial statements, which are prepared an
Slide 27: Marie
27 Marie Average hashrate in August was 464.4, compared to 493.8 in July o The decrease was due to seasonal factors including TVA curtailments, weather related hash rate reductions, outages and a transformer malfunction that has been resolved o Average prop hashrate for the first half of September i
Slide 28: Marie: Non-GAAP Historical Financials
28 Marie: Non-GAAP Historical Financials(A) (A) Marie excludes pass-through revenue and expenses from Legacy Hosting customers. Electricity/Direct Costs reduced by Marie “Prepaid Lease Cost” August 2021 onward.. For details on legacy hosting, see appendix. For more information on these non-GAAP fina
Slide 29: Marie: Operating Metrics
29 Marie: Operating Metrics(A) (A) Marie excludes pass-through revenue and expenses from Legacy Hosting customers. Electricity/Direct Costs reduced by Marie “Prepaid Lease Cost” August 2021 onward. For details on legacy hosting, see appendix. For more information on these non-GAAP financial measures
Slide 30: Edith
30 Edith Sale of GPU Miners at the Edith Facility closed in September valuing the assets at $790k o $500k upfront, $290k in the form of a promissory note due in March 2023 which will pay 20% annualized interest on a monthly basis Adjusted Cash Contribution Margin (Non-GAAP), at $29 thousand for Augu
Slide 31: Edith: Non-GAAP Historical Financials
31 Edith: Non-GAAP Historical Financials For more information on these non-GAAP financial measures, please see the section captioned “Reconciliation of non-GAAP results of operations to the nearest comparable GAAP measures”. To supplement our consolidated financial statements, which are prepared and
Slide 32: Site Consolidation
32 Site Consolidation Average BTC mined increased by 6% versus July Combined installed hashrate increased by 19% to 1 EH/s over average 856.1 PH/s average in August Sites stable even in lower BTC price environment Note: Jun -Aug 2022 Hashrate is average of the month. * Daily average hashrate. 6% 8%
Slide 33: Consolidated Soluna Computing Non-GAAP Historical Financials
33 Consolidated Soluna Computing Non-GAAP Historical Financials(A) (A) Marie excludes pass-through revenue and expenses from Legacy Hosting customers. Electricity/Direct Costs reduced by Marie “Prepaid Lease Cost” August 2021 onward. For details on legacy hosting, see appendix. For more information
Slide 34: Consolidated Soluna Computing Operating Metrics
34 Consolidated Soluna Computing Operating Metrics(A) (A) Marie excludes pass-through revenue and expenses from Legacy Hosting customers. Electricity/Direct Costs reduced by Marie “Prepaid Lease Cost” August 2021 onward. For details on legacy hosting, see appendix. For more information on these non-
Slide 35: Appendix
35 Appendix
Slide 36: Our data centers are named after catalyzers
36 Our data centers are named after catalyzers Edith Sophie Marie Marie Curie was a fearless seeker of truth—a pioneer in the field of radioactivity. She won two Nobel Prizes. In pursuit of the truth, Soluna is constructing a data center with complete transparency to help make the grid stable. Why s
Slide 37: Marie: Impact of forced shutdown
37 Marie: Impact of forced shutdown *Note: Management estimate Forced shutdown led to a reduction in revenue of $531 and $319 thousand (12.82 and 7.59 BTC equivalent mined) in April and March, respectively and Cash Contribution Margin of $278 and $163 thousand, respectively A new line was installed
Slide 38: Consolidated Non-GAAP Historical Financials With Legacy Hosting
38 Consolidated Soluna Computing Non-GAAP Historical Financials With Legacy Hosting For more information on these non-GAAP financial measures, please see the section captioned “Reconciliation of non-GAAP results of operations to the nearest comparable GAAP measures”. To supplement our consolidated f
Slide 39: Consolidated Operating Metrics With Legacy Hosting
39 Consolidated Operating Metrics With Legacy Hosting For more information on these non-GAAP financial measures, please see the section captioned “Reconciliation of non-GAAP results of operations to the nearest comparable GAAP measures”. To supplement our consolidated financial statements, which are
Slide 40: Marie: Non-GAAP Historical Financials With Legacy Hosting
40 Marie: Non-GAAP Historical Financials With Legacy Hosting For more information on these non-GAAP financial measures, please see the section captioned “Reconciliation of non-GAAP results of operations to the nearest comparable GAAP measures”. To supplement our consolidated financial statements, wh
Slide 41: Reconciliation of non-GAAP results to comparable GAAP measures
41 Reconciliation of non-GAAP results of operations to the nearest comparable GAAP measures
Slide 42: 2022 August YTD
42 2022 August YTD - Reconciliation Of Non-GAAP Results
Slide 43: 2022 August YTD
43 2022 August YTD - Reconciliation Of Non-GAAP Results
Slide 44: 2022 August YTD
44 2022 August YTD - Reconciliation Of Non-GAAP Results
Slide 45: 2022 Q2
45 2022 Q2 - Reconciliation Of Non-GAAP Results
Slide 46: 2022 Q2
46 2022 Q2 - Reconciliation Of Non-GAAP Results
Slide 47: 2022 Q2
47 2022 Q2 - Reconciliation Of Non-GAAP Results
Slide 48: 2022 Q2 Adjusted EBITDA note
48 2022 Q2 - Reconciliation Of Non-GAAP Results Note: Adjusted EBITDA with Legacy Hosting Customer can be calculated by excluding the “Prepaid Lease Cost”, “Legacy Hosting Contribution Margin” and “One Time Projects and Events Adjustment” lines from the schedule above.
Slide 49: 2022 Q1 Reconciliation from GAAP Revenue to Non-GAAP Revenue
49 2022 Q1 - Reconciliation Of Non-GAAP Results Reconciliation from GAAP Revenue to Non-GAAP Revenue ($ in 000s) (Unaudited) Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $517 $4,991 $3,808 $0 $9,316 less Legacy Hosting Revenue 0 52 0 0 52 Revenue (Non-GAAP) $517 $4,940 $3,808 $0
Slide 50: 2022 Q1 Reconciliation to Adjusted Cost of Revenue
50 2022 Q1 - Reconciliation Of Non-GAAP Results Reconciliation from Cost of Cryptocurrency Revenue to Adjusted Cost of Revenue (Non-GAAP) ($ in 000s) (Unaudited) Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $517 $4,991 $3,808 $0 $9,316 Cost of cryptocurrency revenue (GAAP): Elect
Slide 51: 2022 Q1 Contribution Margin Reconciliation
51 2022 Q1 - Reconciliation Of Non-GAAP Results ($ in 000s) (Unaudited) Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $517 $4,991 $3,808 $0 $9,316 Cost of cryptocurrency revenue (GAAP) 299 4,598 3,961 0 8,859 Depreciation 93 2,127 2,104 0 4,324 Project Equipment Repairs 0 0 0 0 0
Slide 52: 2022 Q1 Adjusted EBITDA
52 2022 Q1 - Reconciliation Of Non-GAAP Results Note: Adjusted EBITDA with Legacy Hosting Customer can be calculated by excluding the “Prepaid Lease Cost”, “Legacy Hosting Contribution Margin” and “One Time Projects and Events Adjustment” lines from the schedule above.
Slide 53: 2021 FY Reconciliation from GAAP Revenue to Non-GAAP Revenue
53 2021 FY - Reconciliation Of Non-GAAP Results Reconciliation from GAAP Revenue to Non-GAAP Revenue ($ in 000s) (Unaudited) Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $3,648 $7,925 $2,772 $0 $14,345 less Legacy Hosting Revenue 0 1,335 0 0 1,335 Revenue (Non-GAAP) $3,648 $6,590
Slide 54: 2021 FY Reconciliation to Adjusted Cost of Revenue
54 Reconciliation from Cost of Cryptocurrency Revenue to Adjusted Cost of Revenue (Non-GAAP) ($ in 000s) (Unaudited) Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $3,648 $7,925 $2,772 $0 $14,345 Cost of cryptocurrency revenue (GAAP): Electricity/Direct costs* 611 3,712 884 0 5,207
Slide 55: 2021 FY Contribution Margin Reconciliation
55 2021 FY - Reconciliation Of Non-GAAP Results ($ in 000s) (Unaudited) Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $3,648 $7,925 $2,772 $0 $14,345 Cost of cryptocurrency revenue (GAAP) 1,174 4,992 1,904 0 8,070 Depreciation 314 1,096 713 0 2,123 Project Equipment Repairs 23 0 0
Slide 56: 2021 FY Adjusted EBITDA Reconciliation
56 2021 FY - Reconciliation Of Non-GAAP Results ($ in 000s) (Unaudited) Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $3,648 $7,925 $2,772 $0 $14,345 Cost of cryptocurrency revenue (GAAP) 1,174 4,992 1,904 0 8,070 Depreciation 314 1,096 713 0 2,123 Project Equipment Repairs 23 0 0
Slide 57: 2021 Q4 Reconciliation from GAAP Revenue to Non-GAAP Revenue
57 2021 Q4 - Reconciliation Of Non-GAAP Results Reconciliation from GAAP Revenue to Non-GAAP Revenue ($ in 000s) (Unaudited) Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $864 $4,933 $2,772 $0 $8,569 less Legacy Hosting Revenue 0 579 0 0 579 Revenue (Non-GAAP) $864 $4,354 $2,772 $
Slide 58: 2021 Q4 Reconciliation to Adjusted Cost of Revenue
58 2021 Q4 - Reconciliation Of Non-GAAP Results Reconciliation from Cost of Cryptocurrency Revenue to Adjusted Cost of Revenue (Non-GAAP) ($ in 000s) (Unaudited) Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $864 $4,933 $2,772 $0 $8,569 Cost of cryptocurrency revenue (GAAP): Elect
Slide 59: 2021 Q4 Contribution Margin Reconciliation
59 2021 Q4 - Reconciliation Of Non-GAAP Results ($ in 000s) (Unaudited) Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $864 $4,933 $2,772 $0 $8,569 Cost of cryptocurrency revenue (GAAP) 299 3,274 1,881 0 5,455 Depreciation 91 938 713 0 1,742 Project Equipment Repairs 0 0 0 0 0 Cont
Slide 60: 2021 Q4 Adjusted EBITDA Reconciliation
60 2021 Q4 - Reconciliation Of Non-GAAP Results ($ in 000s) (Unaudited) Edith Marie Sophie Corporate Total Cryptocurrency revenue (GAAP) $864 $4,933 $2,772 $0 $8,569 Cost of cryptocurrency revenue (GAAP) 299 3,274 1,881 0 $5,455 Depreciation 91 938 713 0 $1,742 Project Equipment Repairs 0 0 0 0 $0 p
Slide 61: 2021 Q3 Reconciliation from GAAP Revenue to Non-GAAP Revenue
61 Reconciliation from GAAP Revenue to Non-GAAP Revenue ($ in 000s) (Unaudited) Edith Marie Sophie Corporate Total MTII Corporate Consolidated Product revenue (GAAP) $0 $0 $0 $0 $0 $1,949 $0 $1,949 Cryptocurrency revenue (GAAP) $905 $2,219 $0 $0 $3,124 $0 $0 $3,124 less Legacy Hosting Revenue 0 757
Slide 62: 2021 Q3 Reconciliation to Adjusted Cost of Revenue
62 Reconciliation from Cost of Cryptocurrency Revenue to Adjusted Cost of Revenue (Non-GAAP) ($ in 000s) (Unaudited) Edith Marie Sophie Corporate Total MTII Corporate Consolidated Product revenue (GAAP) $0 $0 $0 $0 $0 $1,949 $0 $1,949 Cryptocurrency revenue (GAAP) $905 $2,219 $0 $0 $3,124 $0 $0 $3,1
Slide 63: 2021 Q3 Contribution Margin Reconciliation
63 ($ in 000s) (Unaudited) Edith Marie Sophie Corporate Total MTII Corporate Consolidated Product revenue (GAAP) $0 $0 $0 $0 $0 $1,949 $0 $1,949 Cryptocurrency revenue (GAAP) $905 $2,219 $0 $0 $3,124 $0 $0 $3,124 Cost of product revenue (GAAP) 0 0 0 0 0 661 0 661 Cost of cryptocurrency revenue (GAAP
Slide 64: 2021 Q3 Adjusted EBITDA Contribution Reconciliation
64 2021 Q3 - Reconciliation Of Non-GAAP Results Reconciliation from Operating (Loss) Income to Adjusted EBITDA Contribution (Non-GAAP) ($ in 000s) (Unaudited) Edith Marie Sophie Corporate Total MTII Corporate Consolidated Net (Loss) Income (GAAP) $581 $259 ($217) ($1,089) ($466) $678 ($822) ($610) I
Slide 65: 2021 Q2 Reconciliation to Adjusted Cost of Revenue
65 Reconciliation from Cost of Cryptocurrency Revenue to Adjusted Cost of Revenue (Non-GAAP) ($ in 000s) (Unaudited) Edith Marie Sophie Corporate Total MTII Corporate Consolidated Product revenue (GAAP) $0 $0 $0 $0 $0 $1,647 $0 $1,647 Cryptocurrency revenue (GAAP) $988 $669 $0 $0 $1,657 $0 $0 $1,657
Slide 66: 2021 Q2 Contribution Margin Reconciliation
66 Reconciliation from Revenue and Cost of Revenue to Contribution Margin (Non-GAAP) ($ in 000s) (Unaudited) Edith Marie Sophie Corporate Total MTII Corporate Consolidated Product revenue (GAAP) $0 $0 $0 $0 $0 $1,647 $0 $1,647 Cryptocurrency revenue (GAAP) $988 $669 $0 $0 $1,657 $0 $0 $1,657 Cost of
Slide 67: 2021 Q2 Adjusted EBITDA Contribution Reconciliation
67 Reconciliation from Operating (Loss) Income to Adjusted EBITDA Contribution (Non-GAAP) ($ in 000s) (Unaudited) Edith Marie Sophie Corporate Total MTII Corporate Consolidated Net (Loss) Income (GAAP) $554 $321 ($38) ($126) $710 ($270) ($1,614) ($1,174) Other Income (Expense) $0 $0 $0 $0 $0 $5 ($3)
Slide 68: 2021 Q1 Reconciliation to Adjusted Cost of Revenue
68 Reconciliation from Cost of Cryptocurrency Revenue to Adjusted Cost of Revenue (Non-GAAP) ($ in 000s) (Unaudited) Edith Marie Sophie Corporate Total MTII Corporate Consolidated Product revenue (GAAP) $0 $0 $0 $0 $0 $1,337 $0 $1,337 Cryptocurrency revenue (GAAP) $891 $104 $0 $0 $995 $0 $0 $995 Cos
Slide 69: 2021 Q1 Contribution Margin Reconciliation
69 Reconciliation from Revenue and Cost of Revenue to Contribution Margin (Non-GAAP) ($ in 000s) (Unaudited) Edith Marie Sophie Corporate Total MTII Corporate Consolidated Product revenue (GAAP) $0 $0 $0 $0 $0 $1,337 $0 $1,337 Cryptocurrency revenue (GAAP) $891 $104 $0 $0 $995 $0 $0 $995 Cost of pro
Slide 70: 2021 Q1 Adjusted EBITDA Contribution Reconciliation
70 Reconciliation from Operating (Loss) Income to Adjusted EBITDA Contribution (Non-GAAP) ($ in 000s) (Unaudited) Edith Marie Sophie Corporate Total MTII Corporate Consolidated Operating (Loss) Income (GAAP) $566 ($287) ($170) ($48) $62 ($402) ($331) ($671) Depreciation (GAAP) $68 $8 $0 $0 $76 $17 $
Slide 71: The future of renewable energy is computing.
71 The future of renewable energy is computing.
Slide 72: Learn more at solunacomputing.com
72 Learn more at solunacomputing.com
Soluna Holdings — Earnings Presentation (September 2022) on 6ix