Bitfarms Ltd

Key Reasons for Speculative Buy

Financial Performance Highlights: Bitfarms Ltd. reported Q1 2025 revenue of USD 67 million, reflecting a 33% year-over-year increase. However, the company’s gross mining margin declined significantly to 43%, down from 63% in Q1 2024, largely due to elevated production costs. General and administrative expenses rose to USD 20 million, influenced by USD 2 million in one-time transaction-related costs. Operating loss widened to USD 32 million from USD 24 million in the prior year, while net loss escalated to USD 36 million, or USD 0.07 per share, compared to a net loss of USD 6 million, or USD 0.02 per share, in Q1 2024. Adjusted EBITDA dropped to USD 16 million, or 23% of revenue, from USD 23 million or 46% of revenue in the same quarter last year.

Strategic Realignment and U.S. Expansion: During the quarter, Bitfarms executed critical steps in its strategic shift toward high-performance computing (HPC) and U.S.-based operations. This included divesting its Yguazu mining facility in Paraguay and acquiring two power campuses in Pennsylvania via the Stronghold acquisition. These moves reduced capital expenditure needs for Bitcoin mining while securing infrastructure critical to future HPC/AI growth. The company also made key management additions and partnerships, enhancing its ability to scale HPC operations across North America.

Operational Efficiency Gains in Mining: The company’s core Bitcoin mining segment saw substantial operational improvements. As of March 31, 2025, Bitfarms’ hashrate surged 200% year-over-year to 19.5 exahash per second (EHuM), while energy efficiency improved by 44% to 19 watts per terahash (w/TH), down from 34 w/TH a year earlier. These advancements enabled Bitfarms to earn 693 BTC during the quarter at an average direct production cost of USD 47,800 per BTC. Nonetheless, the total cash cost per BTC stood high at USD 72,300, reflecting broader infrastructure and operational investments.

Strengthened Liquidity and Strategic Financing: Bitfarms ended the period with approximately USD 150 million in liquidity as of May 13, 2025. During Q1, the company sold 428 BTC at an average price of USD 87,100, generating USD 37 million. An additional 350 BTC were sold in April 2025 for USD 30 million. In January, Bitfarms raised USD 24 million in net proceeds through its at-the-market equity offering but did not issue further shares through May. Notably, a USD 300 million private debt facility was secured with a division of Macquarie Group to fund initial HPC development at Panther Creek, offering non-dilutive capital to support its U.S. growth ambitions.

Advancement of U.S. HPC Data Center Initiatives: Bitfarms made material progress on its U.S. HPC infrastructure. The company completed feasibility studies at its U.S. sites, with support from strategic partners ASG and World Wide Technology. Work has commenced on development plans, budgets, and construction timelines for the Panther Creek campus, which has been identified as a high-potential flagship site due to its scalability, power access, and fiber connectivity. Strategic hires including James Bond (SVP, HPC/AI) and Craig Hibbard (SVP, Infrastructure) will help lead the buildout of Bitfarms’ AI-focused infrastructure portfolio.

Outlook and Core Mining Stability: Despite volatility in crypto markets, Bitfarms maintains a steady foundation in its mining operations. With no significant new mining equipment purchases planned and manageable exposure to potential tariffs, the company expects consistent cash flow from its mining segment. This stability is expected to underpin capital-efficient expansion into HPC and AI services. The Bitcoin One program and success of the 2024 Synthetic HODL™ initiative are also expected to enhance market-facing strategies and capital allocation going forward.

Technical Commentary:

BITF's stock price found support at crucial levels and gradually moved higher, suggesting a potential upward move in the near term. The 14-period RSI remains above the midpoint, indicating sustained positive momentum and reinforcing a bullish perspective. Furthermore, the stock has reclaimed its 21-period Simple Moving Average, which adds to the positive outlook. Overall, these technical signals suggest that the stock could see further gains, provided it maintains its position above these support levels.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Speculative Buy’ rating has been given to Bitfarms Ltd.  (NASDAQ: BITF) at its current market price of CAD 1.56 as of July 21, 2025 (7:00 am PDT).