American Bitcoin Posts $126M Q3 Profit as Mining Margins Shrink

• A $197.3 million digital asset gain helped drive American Bitcoin to a $126 million quarterly profit.
• Mining revenue declined 5.4%, while production costs increased approximately 15%.
• Bitcoin reserves grew to 8,427 BTC without open-market purchases during the quarter.

American Bitcoin returned to profit in the third quarter, supported by a $197.3 million gain on digital assets. The miner reported $126 million in net income, reversing a $57.2 million second-quarter loss. However, mining revenue and production declined as higher power costs squeezed margins. The November 4 results also showed continued growth in its Bitcoin reserve. 

American Bitcoin Profit Rises on Digital Asset Revaluation

According to its earnings release, adjusted EBITDA reached approximately $221 million, compared with a $45 million loss previously. The digital asset gain contrasted with a $71.2 million loss in the preceding quarter.

In a press release, American Bitcoin also recorded a $64.3 million derivative loss, partly offsetting the improvement. The return to profitability therefore depended heavily on asset valuations, while mining performance weakened. 

Mining revenue fell 5.4% to $63.4 million from $67 million. Production dropped to approximately 891 BTC, down from 932 BTC in the second quarter.

Gross profit declined to $25.8 million from $33 million. Gross margin narrowed eight percentage points to 41%, highlighting the pressure on earnings generated directly from mining.

Mining Costs Rise as Bitcoin Reserves Grow Without Purchases

American Bitcoin reported a mining cost of approximately $42,100 per coin, compared with $36,500 previously. Management attributed the increase mainly to seasonal power costs.

Revenue per Bitcoin mined slipped to approximately $71,100 from $71,900. Mining costs therefore rose while revenue earned per coin fell, compressing the spread between the two measures.

Despite that pressure, American Bitcoin added approximately 425 BTC to its reserve, bringing holdings to 8,427 BTC. It sold part of its production to cover operating expenses and made no Bitcoin purchases during the quarter.

Management said it issued no shares through its at-the-market program during the period. Satoshis per share increased approximately 5% to 11,572. The quarter-end reserve included approximately 3,090 BTC pledged under miner purchase agreements with Bitmain.

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