LM Funding (LMFA) Q4 2025 Earnings Call Transcript

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DATE

Friday, March 27, 2026 at 8 a.m. ET

CALL PARTICIPANTS

• Chairman & Chief Executive Officer — Bruce M. Rodgers
• Chief Financial Officer — Richard Russell
• Chief Operating Officer — Ryan Duran

TAKEAWAYS

• Revenue -- $2.4 million for the quarter, increasing 8.7% sequentially and 19% year over year.
• Mining Production -- 22 Bitcoin mined during the quarter, up 25% sequentially from 17.6 Bitcoin in the previous quarter.
• Bitcoin Holdings -- 356 Bitcoin held at year-end, valued at approximately $31.2 million, more than double the holdings from the prior year.
• Mining Margin -- 25% in the quarter, down from 49% sequentially due to lower average Bitcoin price and reduced curtailment/energy sales.
• Net Loss -- $17.9 million for the quarter, driven primarily by a $7.8 million unrealized fair value loss on Bitcoin, a $5.4 million impairment on mining equipment, depreciation/amortization, and incremental operating expenses for the Mississippi site.
• Core EBITDA Loss -- $9.3 million for the quarter, as clarified by Richard Russell.
• Total Assets -- $51.3 million as of year-end, with $31.2 million in Bitcoin-related assets.
• Total Liabilities -- $22.4 million, led by an $11 million Galaxy Digital loan and a $7 million note payable.
• Capacity Expansion -- 26 megawatts across two wholly owned sites with approximately 750 petahash energized at year-end; further efficiency gains stemming from immersion mining initiatives.
• Capital Actions -- $8 million deployed from the Galaxy facility to repurchase over 3.3 million shares and 7.2 million warrants in a single transaction, reducing dilution.
• Site Portfolio -- Acquisition of an 11-megawatt Mississippi site finalized, adding 7.5 megawatts energized and 220 petahash, with targeted power rates of $0.036 per kWh.
• Operational Efficiency -- Migration from third-party hosting to wholly owned Oklahoma site, replacement of S19 JPro miners with newer S21 and XP hardware for power savings and margin expansion.
• Curtailment/Energy Sales -- $135,000 recorded in the quarter, down from $150,000 sequentially, consistent with cooler operating conditions and increased uptime.
• Strategic Focus -- Ongoing evaluation of M&A opportunities in the 5-20 megawatt range; disciplined approach to capital allocation and site expansion, as described on the call.

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RISKS

• Richard Russell stated, "Mining margin for the quarter was 25% compared to 49% in Q3 2025. The sequential decline was driven primarily by a lower average Bitcoin price, which compressed revenue per coin against a relative fixed cost base."
• Richard Russell cited, "mark-to-market movements in our Bitcoin treasury as Bitcoin price declined from approximately $114,000 at September 30 to approximately $88,000 at December 31, producing an unrealized fair value adjustment of $7.8 million."
• "a noncash $5.4 million impairment loss on mining equipment as a result of the reduced Bitcoin pricing environment;" was recorded in the quarter, according to Richard Russell.
• Ongoing equity valuation remains at a "material discount to the value of our Bitcoin treasury and productive infrastructure," as noted by Bruce Rodgers.

SUMMARY

LM Funding America (NASDAQ:LMFA) advanced its transformation into a vertically integrated crypto miner during the quarter, growing to two wholly owned sites, 26 megawatts of capacity, and a year-end high of 356 Bitcoin held. Management executed a major capital restructuring by using $8 million from its Galaxy facility to retire significant equity and warrants, improving per-share economics and reducing dilution. The quarter saw core production and asset scaling, though operational gains were countered by a compressed mining margin caused by Bitcoin price declines, resulting in a net loss of $17.9 million and unrealized losses on assets. Deliberate hardware upgrades and power cost reductions contributed to improved fleet uptime and expanded hash rate, while a disciplined M&A approach focuses on additional capacity within targeted efficiency and cost ranges.

• Cash deployment and share repurchases, alongside continued capital raises, have maintained asset levels above current market capitalization despite recent losses.
• Following the quarter, a second immersion unit was energized in January and further miner upgrades and deployments increased total hash rate to 782 petahash by late February, its highest-ever level.
• The company renegotiated the Galaxy Digital loan, extending maturity to April 2026, providing flexibility for future settlement options.
• Management continues to address the persistent gap between equity value and net asset value through operational growth, transparent communication, and active pipeline sourcing for expansion opportunities.

INDUSTRY GLOSSARY

• Immersion Mining: A mining technology where ASIC miners are submerged in a dielectric coolant to improve heat dissipation, increase efficiency, and reduce hardware wear and energy costs.
• Curtailment: Intentional reduction of power usage or operational downtime in response to market price signals or grid demand, often monetized by selling unused energy capacity back to the grid.
• Petahash: A unit of computational power representing one quadrillion (1015) hashes per second; standard for measuring hash rate in Bitcoin mining operations.

Full Conference Call Transcript

Bruce Rodgers: Thanks, Cody. Good morning, everyone, and thank you for joining us. 2025 was a transformational year for LM Funding. We entered the year as an early-stage vertically integrated miner with a single-owned site and a modest Bitcoin treasury. We exited as a multisite vertically integrated platform with a significantly larger treasury and a simplified capital structure and the operational foundation to support the next phase of our growth. Let me walk you through what we accomplished across the year before turning to the specifics of Q4. On the infrastructure side, we started the year completing the ramp-up of our Oklahoma site, our first wholly-owned facility.

Over the course of 2025, we completed the acquisition of our 11-megawatt site in Columbus, Mississippi, bringing our total owned capacity to 26 megawatts across 2 facilities. On the treasury side, we grew our Bitcoin holdings from approximately 150 Bitcoin at the end of last year to just over 356 Bitcoin at December 31, more than doubling our holdings. That growth came through a combination of mining production and disciplined strategic accumulation. Turning to Q4 specifically. The quarter was about building momentum heading into 2026.

We mined 22 Bitcoin during the quarter, up from 17.6 in Q3 as our Mississippi facility continued to ramp up, and our Oklahoma site benefited from cooler operating conditions and improved uptime in the fall months. At December 31, our Bitcoin holdings were valued at approximately $31.2 million based on year-end Bitcoin prices, including the Bitcoin held by Galaxy compared to a market capitalization well below that level. The net result -- we exit 2025 with a stronger operational platform, larger Bitcoin holdings and a more aligned capital structure.

At the same time, our equity continues to trade at a material discount to the value of our Bitcoin treasury and productive infrastructure, a disconnect that we remain focused on and addressing through continued operational execution. As we enter 2026, our focus shifts from foundation building to scaling. And with our immersion expansion progressing in Oklahoma and our Mississippi site continuing to operate at a steady state, we have the platform to grow production, improve efficiency and increase Bitcoin per share. With that, let me turn it over to Ryan to walk through the operational details for the quarter and the year. Ryan?

Ryan Duran: Thanks, Bruce. 2025 was the year we built and scaled our mining platform. We started with a single site in Oklahoma at approximately 560 petahash energized, and we exit with 2 wholly-owned sites, Oklahoma and Mississippi, totaling 26 megawatts of capacity and approximately 750 petahash energized across 22.5 megawatts at the end of the year, with further expansion continuing into Q1. Let me give you some additional context of how this played out operationally. In the first half of the year, we focused on completely exiting from a third-party hosting site and consolidating our entire fleet at our wholly-owned site in Oklahoma.

That relocation, which moved roughly 800 machines to our own vertically integrated site, replaced older S19 JPro miners with more efficient S21 and XP hardware. Our Oklahoma site also benefited from significantly lower power costs compared to what we had previously been paying at the hosted site, which drove significant power cost savings and margin expansion. In Q3, we closed on the acquisition of an 11-megawatt Bitcoin mining facility in Columbus, Mississippi. The acquisition immediately added approximately 7.5 megawatts of energized capacity and approximately 220 petahash of operational hash rate. This site comes with favorable power pricing of approximately $0.036 per kilowatt hour, one of the most cost-effective power rates in our portfolio.

October marked the first full month of production with our newly integrated Mississippi site online, driving a 27% increase in Bitcoin production from 5.9 BTC in September to 7.5 BTC in October. In Q4, we shifted focus to the next efficiency layer, Immersion. In December, we successfully energized our first BC40 Elite immersion cooled unit in Oklahoma, powering 160 Bitmain S21 immersion miners, which added approximately 35 petahash to our energized hash rate. This marked the beginning of our Immersion program. On fleet performance, in Q4, we operated approximately 6,850 machines across our 2 sites. The cooler fall and winter conditions in Oklahoma contributed to improved uptime and higher production relative to the curtailment heavy Q2 and Q3 periods.

Curtailment and energy sales totaled approximately $135,000 in the quarter, down from $150,000 in Q3, which was expected as a result of cooler temperatures in Q4 and a higher mix of immersion machines, which requires lower curtailment. More recently, in January 2026, we energized a second immersion container, adding another 35 petahash. In late February, we deployed approximately 300 Bitmain S21 XP miners at Oklahoma, replacing older machines and reallocating higher terahash units to Mississippi, bringing our total energized hash rate to approximately 782 petahash, the highest in company history.

Looking ahead into 2026, we are now operating at record highs in energized hash rate, Bitcoin production and overall fleet efficiency, driven by our 2 vertically integrated sites with structurally low cost power. As the Bitcoin market recovers, we believe our strengthened platform and enhanced economies of scale will deliver strong value to our shareholders. With that, I'll turn it over to Rick to walk through the financials. Rick?

Richard Russell: Thanks, Ryan. For the fourth quarter 2025, total revenue was $2.4 million, up 8.7% sequentially from Q3 and up 19% year-over-year. The sequential increase reflects higher Bitcoin production of 22 Bitcoin in Q4 versus 17.6 Bitcoin in Q3, a 25% improvement, partially offset by a lower average Bitcoin price of approximately $99,700 in Q4 versus $114,000 in Q3. Mining margin for the quarter was 25% compared to 49% in Q3 2025. The sequential decline was driven primarily by a lower average Bitcoin price, which compressed revenue per coin against a relative fixed cost base. Lower curtailment and energy sales were a secondary factor at approximately $135,000 versus $150,000 in Q3.

The reduction netted directly against our cost of revenues and put additional pressure on reported margins. It's worth noting that lower curtailment also reflects more mining uptime. Q4 production of 22 Bitcoin was up 25% sequentially from Q3, which partially offset the price-driven revenue compression. Taken together, price and reduced energy sales account for the margin compression in the quarter, while the uptime improvement demonstrates the underlying operational progress. We reported a net loss of $18.2 million and a core EBITDA loss of $9.4 million for Q4 2025.

The Q4 net loss reflects 4 primary factors: First, mark-to-market movements in our Bitcoin treasury as Bitcoin price declined from approximately $114,000 at September 30 to approximately $88,000 at December 31, producing an unrealized fair value adjustment of $7.8 million. Second, a noncash $5.4 million impairment loss on mining equipment as a result of the reduced Bitcoin pricing environment; third, depreciation and amortization associated with our expanded asset base; and fourth, increased operating expenses related to the full quarter integration of the Mississippi facility. These are the expected cost of building and integrating new infrastructure, and they should be evaluated against the strategic and operational progress they enable.

For the full year 2025, total revenue was approximately $8.8 million, and we mined approximately 82.3 Bitcoin during the year. Curtailment and energy sales totaled approximately $658,000, showcasing our ability to capitalize on our assets year-round. Net loss for the year was approximately $27 million and a core EBITDA loss of $10.9 million. More importantly, we grew our Bitcoin holdings from approximately 150 Bitcoin at the start of 2025 to approximately 356 Bitcoin at December 31, which includes 145 Bitcoin reported as a receivable for the Galaxy loan. This is more than doubling our prior year position.

That growth came from both mining and strategic purchases, including the 164 Bitcoin acquired in August 2025 and the 47 Bitcoin acquired in December 2025. Turning to the balance sheet. As of December 31, total assets were $51.3 million with Bitcoin holdings of approximately $31.2 million spread across current long-term and collateral classifications, including the asset base. On the liability side, total liabilities were $22.4 million, the primary component being our $11 million Galaxy Digital Master Digital currency loan and a $7 million short-term note payable. These are manageable relative to our asset base. And more importantly, we put our Galaxy facility to active use in 2025.

Deploying $8 million in October to retire more than 3.3 million shares and 7.2 million warrants in a single transaction. That was a deliberate choice to improve per share economics and simplify our capital structure, and we believe it was the right use of that capital at the time. In February 2026, we also renegotiated the Galaxy facility, extending the maturity date to April 24, 2026, giving us flexibility to evaluate settlement options on our own time line. As of February 28, 2026, we held 354.7 Bitcoins valued at approximately $23.8 million based on a Bitcoin price of approximately $67,000 or approximately $1.11 per share.

Even after executing the share repurchase, funding 2 capital raises and completing the Mississippi acquisition entirely from our balance sheet, we entered 2026 with a $51 million asset base, growing Bitcoin holdings and equity that remains well in excess of our current market capitalization. Closing that gap is the work we are doing every quarter. With that, I'll turn it back to Bruce for closing remarks.

Bruce Rodgers: Thanks, Rick. Let me leave you with where we stand and where we're going. In 2025, we transitioned from building to scaling, 2 owned sites, 26 megawatts of wholly-controlled capacity, Bitcoin holdings that more than doubled, a capital structure we actively managed to reduce dilution and improve per share economics and an immersion program that is now live and scaling. As we move through 2026, our priorities are straightforward: grow production, improve efficiency and increase Bitcoin per share. We are already tracking toward record monthly production in early 2026, with February being our highest production month in company history.

Our second immersion unit came online in January 2026, and we continue to evaluate accretive M&A opportunities in the 5 to 20-megawatt range, the same disciplined approach that led us to our Mississippi acquisition at roughly $355,000 per megawatt. We have active invested management, owned infrastructure and low-cost power. Our Bitcoin treasury has grown meaningfully. Our operational footprint has expanded, and our per share intrinsic value has improved, and yet our equity continues to trade at a material discount to NAV. We remain focused on continuing to close that gap through disciplined execution and transparent communication with our shareholders. We like the path we're on and the structure we've built. Thank you for your continued support.

We'll now open the line for questions.

Richard Russell: This is Richard Russell. I just want to clarify that we reported a net loss of $17.9 million and a core EBITDA loss of $9.3 million for Q4 2025. We'll take the first question now.

Operator: [Operator Instructions] Our first question comes from the line of Matthew Galinko with Maxim Group.

Matthew Galinko: Maybe firstly, will it take time to optimize production from the immersion-cooled units? Or are you kind of just right out of the gate where you want to be?

Bruce Rodgers: Ryan, do you want to take that?

Ryan Duran: Matt. Yes. So we -- right out of the gate, we're maxed out our 2 fog hash containers with S21 immersion miners that are the best we could get. So I guess in that context, yes, we are maxed out at roughly that 35 petahash per container as of right now and what's available on the market. And yes, I hope that answers your question.

Matthew Galinko: All right. Great. And then as far as your pipeline for new site acquisition versus existing site expansion, can you maybe just go through how those 2 buckets look?

Ryan Duran: Yes. So we're always on the hunt. We're always looking, keeping our finger on the pulse of what's out there. We are looking, as we've always maintained in that less than 20-megawatt range at ideally a power price in that $0.035 to $0.045 range. And that's what we target, whether it be existing sites or greenfields. And also, we have -- we also do -- our main focus as of right now, I'd say the easiest thing to point to is the additional a little over 3 megawatts that we have available at our current Mississippi site to continue building out. So that's already in our hands.

Matthew Galinko: Got it. And maybe just -- the final question on -- maybe just reiterate how you think about funding new site acquisition and minor acquisition and how your current discount to NAV might influence how you think about capital spending and site acquisition and hash rate expansion?

Richard Russell: That's a good question, Matt. It's got the same answer, but a moving target. We have to look at the dollar and then we look at projecting out as to where we want to be in terms of acquiring Bitcoin and holding Bitcoin when Bitcoin realizes price. So we put targets based on projections of where Bitcoin will be and then we sort of back into it. We're currently trading Bitcoin outside of the range where our forecasts were. So it makes some of our thinking more in the moment than using the long-range discipline.

But it really boils down to if you spend $1 today, is it going to -- how much will it increase our Bitcoin holdings 5 years from now or 3 years from now. And that leans heavily towards both increasing the treasury and increasing the miners when it's at this price point. And then some of the mining opportunities are just timing based. So you have to take the opportunity, when it's there and make it foot towards your future growth development. It's always a challenge, and there's really no formula to it.

Operator: [Operator Instructions] Since there are no further questions, I would like to thank everyone for joining us on LM Funding America, Inc.'s Fourth Quarter and Full Year 2025 Earnings Call. You may now disconnect.

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