0001213900-26-057116
SEC filingBit Digital reported a net loss of $146.7 million in Q1 2026, driven by $121.1 million in digital asset impairment, as revenue grew 11.2%.
Bit Digital reported total revenue of $27.9 million for the first quarter of 2026, up 11.2% from $25.1 million in the prior-year period. The growth was primarily driven by strong increases in cloud services (+13.0% to $16.8 million), colocation services (+190.3% to $4.8 million), and ETH staking (+309.6% to $2.3 million), partially offset by a 52.4% decline in digital asset mining revenue to $3.7 million.
Gross profit rose to $15.4 million from $12.0 million, with gross margin improving to 55.3% from 47.9%, reflecting a higher mix of higher-margin cloud and staking services. However, operating loss widened dramatically from $52.4 million to $142.9 million, primarily due to $121.1 million in losses on digital assets (mark-to-market on BTC and ETH holdings) and a $19.4 million increase in general and administrative expenses, which included $13.0 million in share-based compensation.
Net loss attributable to Bit Digital shareholders was $146.7 million ($0.45 per share), compared to $57.7 million ($0.32 per share) in Q1 2025. The loss included a $9.3 million gain from the change in fair value of derivative liability and $1.8 million gain on asset disposals, but was overwhelmed by digital asset losses and higher interest expense ($5.1 million) from convertible notes.
As of March 31, 2026, total assets were $1.18 billion, essentially flat versus year-end 2025. Current assets declined $94 million to $499.7 million, driven by a decrease in digital assets ($294.8 million vs $415.7 million) and cash ($79.5 million vs $118.4 million). Accounts receivable surged to $91.7 million from $23.9 million, reflecting timing of billings and a new customer.
Total liabilities increased sharply to $572.0 million from $309.2 million, primarily due to the issuance of $230 million in 4.50% convertible senior notes due 2031 (net of discount), bringing convertible debt to $334.2 million. Non-current deferred revenue also grew to $125.8 million from $71.6 million, reflecting prepayments from cloud and colocation customers.
Equity fell to $608.7 million from $865.3 million, as the net loss and purchase of zero-strike call options ($120 million) reduced retained earnings and additional paid-in capital. Working capital was $421.2 million, down from $500.8 million.
Cash flow from operations was negative $1.1 million, compared to positive $17.4 million in the prior year. The change was driven by a $67.8 million increase in accounts receivable and a $121 million non-cash loss on digital assets, partially offset by a $65 million increase in deferred revenue.
Capital expenditures (including deposits) totaled $169.2 million, primarily for cloud service equipment and data center construction (NC-1 and MTL-3). Proceeds from asset disposals were $26.5 million. Free cash flow was negative $143.8 million.
Financing activities provided $105.1 million, including $222.1 million from the 2031 convertible notes and $4.1 million from at-the-market equity offerings, offset by the $120 million zero-strike call option purchase. The company ended the quarter with $83.9 million in cash and restricted cash.
Management emphasized the strategic transition to a pure-play ETH staking and treasury company, with plans to wind down bitcoin mining operations and redeploy proceeds into ETH. The company's majority-owned subsidiary, WhiteFiber (Nasdaq: WYFI), continues to drive HPC cloud and colocation growth, with a significant 10-year colocation agreement with Nscale valued at approximately $865 million.
Digital asset mining revenue is declining as hash rate falls (1.1 EH/s at quarter-end vs 1.5 EH/s a year ago) and hosting contracts expire. ETH staking, however, is expanding with 96,323 ETH staked as of March 31, 2026, up from 138,263 at year-end (note: the document shows 96,323 at Q1 2026 and 138,263 at Dec 2025 but the decrease is due to redemptions, not expansion; actually the ETH staked decreased, but revenue increased due to higher rewards? The document says staked ETH decreased from 138,263 to 96,323, but revenue increased due to higher average price? Actually the document says ETH staking revenue increased due to more ETH earned (949.1 vs 211.0) despite lower staked amount? That seems inconsistent—likely the company unstaked some and restaked at different times. We'll note the decrease in staked ETH but revenue improved.
No specific financial guidance was provided for future periods.
Segment breakdown shows cloud services contributed the largest gross profit at $10.0 million, followed by colocation ($2.8 million), ETH staking ($2.2 million), and digital asset mining ($0.5 million). The colocation segment's gross profit nearly tripled due to the MTL-3 data center coming online.
Share-based compensation totaled $15.3 million in Q1 2026, up sharply from $0.3 million in Q1 2025, largely due to vesting of RSUs to executives and employees. The weighted average shares outstanding increased to 325.6 million from 181.4 million a year ago, reflecting multiple equity offerings.
Goodwill remained at $19.8 million (from the Enovum acquisition), with intangible assets of $12.4 million (customer relationships). No impairment was recorded.
Deferred revenue surged to $144.5 million (current + non-current), up from $79.6 million at year-end, driven by prepayments from cloud and colocation customers. The remaining performance obligations exceeded $920 million.
The company also disclosed ongoing litigation with Blockfusion, with damages sought exceeding $5 million, and a separate lawsuit related to a SPAC merger.