Digital Currency MiningĬleanSpark's revenue grew almost 400% in Q4 2021 from $10 million to $49.4 million due to an augmented bitcoin mining process. Further, CLSK has added intelligence systems to drive the ROI for microgrids. Microgrid projects are now feasible due to cost reductions for equipment. While Bitcoin mining remains the central revenue stream for CleanSpark, investors should still expect energy developments to produce income for the company.ĭue to the uncertainty occasioned by the COVID-19 Pandemic, commercial as well as residential clients have increased their awareness about the energy market. However, the company is undergoing a shortfall of inventory in the energy segment due to an overwhelming demand program. Thereby, a decline in the business with these three clients will harm the company's financial condition. In its 10-K, CleanSpark admitted that 61.2% of its total energy revenues in the year ending on September 30, 2021, and 64.8% of the revenue a year earlier was attributed to only three customers. Close to 80% of the budget is allocated to energy storage systems allowing CleanSpark to improve its innovations. While being run by the California Public Utilities Commission (CPUC), the SGIP's funding whose budget may exceed $1 billion in funding was extended until 2024. In 2020, the company's energy business operation was based on California's Self-Generation Incentive Program (SGIP). The incentives help to promote renewable energy systems such as solar power generation. CleanSpark depends on incentives such as tax credits and rebates from federal, state, and local government institutions. are also in charge of designing and engineering solutions for storing energy including solar power for microgrid systems. Other subsidiaries such as GridFabric, LLC and Solar Watt Solutions, Inc. In my view, the management of these subsidiaries is yet to adjust to CleanSpark's business model thereby delaying an increase in profit margins. This subsidiary was engaged in the sale, distribution, and service of electrical/power equipment. It was back in 2019 when the company announced the acquisition of Pioneer Power Solutions ( PPSI) that later operated as CleanSpark Critical Power Systems, Inc. One thing to consider is that CleanSpark, a microgrid company offers its energy solutions through its wholly-owned subsidiaries. At the same time, digital currency revenues gained 73% in the quarter to stand at $8.6 million before almost doubling in the nine months to June 2021 to $16.1 million. In the nine months ending on June 30, 2021, energy revenues had declined 33.33% (YoY) from $7.5 million to $5 million. The company had reported delays in the reception of ethernet cables and power cables to support equipment earlier in the year. Q4 2021 saw CleanSpark record flat revenues (YoY) owing to supply chain concerns. In this article, I will explain why I am neutral with CleanSpark although I believe that it is slated for a 5X increase in revenue growth in the FY 2022-2023 due to expanded mining capabilities and advanced green energy opportunities. Shareholders are also protected from dilution with the use of Bitcoins as both current and long-term assets. Even so, the company's background in energy technology will prove pivotal in sustainable bitcoin mining especially in the industrial development of operations. ThesisĬleanSpark's management is yet to embrace a 100% transition to green energy in Bitcoin mining. That said, Bitcoin ( BTC-USD ) had a stellar year in 2021 with the crypto giant hitting a record high despite China's crackdown in the first half of the year. Since the last time I wrote on crypto mining, Greenidge ( GREE) stock has gained almost 22% against the S&P 500's 2.97% price change. CleanSpark ( NASDAQ: CLSK) marked its 1st anniversary in bitcoin mining with a 50% decline in its share price.
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