BitMine Immersion Technologies reported $46.5 million in revenue for the quarter ended May 31. Ethereum staking and validator services generated $45.7 million of that total, accounting for 98% of revenue.
According to the company’s 10-Q filing with the U.S. Securities and Exchange Commission, total revenue stood at just $2.05 million in the same period a year earlier. The sharp increase shows that BitMine has almost completely transformed its business model.
Staking revenue takes the lead
Last year, machine leasing and Bitcoin mining were the company’s main revenue sources. That changed in March, when BitMine acquired Australian validator operator Pier Two and launched the MAVAN platform.
MAVAN, short for Made in America Validator Network, provides Ethereum staking infrastructure for institutional custodians, investors and other participants in the ecosystem.
Chairman Tom Lee said this week that annualized staking revenue could reach $284 million if all of the company’s ETH holdings were staked through MAVAN and its partners. BitMine currently holds 5.42 million ETH, with approximately 4.9 million ETH, or 85% of the portfolio, already staked through MAVAN.
Other revenue streams remained far behind. The company generated $624,000 from its own mining operations and $168,000 from consulting services. It recorded no revenue from equipment leasing or sales, as those business lines had already been discontinued.
The balance sheet shows a large loss
A closer look at the figures reveals a less positive picture. BitMine posted a net loss of $82.2 million for the quarter, compared with only $480,000 a year earlier.
Most of the loss came from a $92.1 million decline related to derivative contracts and a $15.4 million unrealized loss on digital assets. A $16.5 million gain from warrant liabilities and $5.3 million in interest income partly offset the losses, but they were not enough to eliminate them.
As of May 31, the company held 5.42 million ETH and 203 Bitcoin, with a combined value of approximately $10.9 billion. BitMine also reported $340.3 million in cash and $433.1 million in working capital.
Shares moved higher
BMNR shares rose 11.5% on Tuesday following the release of the results, closing at $16.29. Despite the large quarterly loss, investors appeared to focus on the growth of the staking business and Tom Lee’s projections for future revenue.
The picture for BitMine is clear. Its shift toward an Ethereum staking model has created a significant increase in operational revenue. However, volatility in derivative positions and crypto asset valuations continues to weigh heavily on the balance sheet.
The company’s performance in the coming quarters will depend both on the direction of the ETH price and on how far it can increase the proportion of its Ethereum holdings staked through MAVAN beyond the current 85%.
