0001213900-26-057115
SEC filingDigi Power X's Q1 2026 revenue declined 26.8% YoY to $6.79M, with a net loss of $4.65M, driven by a strategic shift from crypto mining to AI infrastructure and a $3.76M digital currency revaluation loss.
Digi Power X reported a challenging first quarter of 2026, with total revenue of $6.79 million, down 26.8% from $9.28 million in the same quarter of 2025. The decline was primarily driven by a 40.5% drop in colocation services revenue (from $5.08M to $3.03M) as the company repurposed hosting space for AI infrastructure buildout, and a 93.8% plunge in cryptocurrency mining revenue (from $0.77M to $0.05M) as mining operations were scaled back. Sales of energy and electricity grew 8.4% to $3.72M, benefiting from higher grid power pricing. Gross loss improved to -$0.80M from -$1.52M, reflecting reduced mining-related power costs. Net loss widened to $4.65M (vs $1.63M), impacted by a $3.76M non-cash loss on revaluation of digital currencies and higher general and administrative expenses ($4.33M vs $2.71M), which included increased share-based compensation and a performance bonus. Diluted EPS was -$0.07 compared to -$0.05. EBITDA swung from positive $0.54M to negative $3.20M, underscoring the transitional nature of the business.
Total assets decreased to $126.93M from $134.11M at year-end 2025, largely due to a $20.66M decline in cash and cash equivalents (from $78.48M to $57.81M). Cash was used for $15.17M in purchases of property, plant, and equipment and $1.0M in investments. Digital currency holdings fell to $13.56M (from $14.81M) after revaluation losses. Current liabilities fell to $5.79M from $8.65M, driven by lower accounts payable. Working capital stood at $67.22M, providing ample liquidity for near-term AI investments. The company had no outstanding debt. Shareholders' equity decreased to $118.94M from $123.26M, with the net loss and foreign currency translation losses partly offset by $1.35M in share-based compensation and $1.91M in contributions from a non-controlling interest.
Operating cash flow was -$6.40M, an improvement from -$10.11M in the prior year, reflecting lower working capital outflows. Net loss of $4.65M was adjusted for non-cash items totaling $0.82M (including digital currency revaluation, warrant revaluation, depreciation, and share-based compensation). Investing activities consumed $16.17M, primarily for capex. Financing activities provided $1.91M from non-controlling interest contributions. Free cash flow (operating cash flow minus capex) was -$21.57M, highlighting the heavy investment phase. Subsequent to quarter-end, the company raised $102.86M via an at-the-market equity program, bolstering its cash position for the Cerebras deployment and other AI initiatives.
Management described the quarter as part of a strategic transformation from cryptocurrency mining to AI-driven data center infrastructure. Key developments included the formation of US Data Centers Inc. (51% owned), the first ARMS 200 Tier III pod assembly, and approval for an additional 60 MW of power in New York. Subsequent events included a bare metal GPU rental agreement with SubQ AI ($19.6M expected value) and a landmark 40 MW colocation agreement with Cerebras Systems Inc., with an initial term value of approximately $1.1 billion and total potential value of $2.5 billion. Phase 1 (15 MW) is targeted for December 15, 2026, with full Phase 2 (40 MW) by end of Q1 2027, contingent on financing. Management anticipates a phased power allocation roadmap: 5 MW in Q1 2026, 15 MW in Q2, 30 MW in Q3, and 55 MW total by Q4. The company continues to face risks related to financing, customer concentration, execution of its evolving business model, and digital currency price volatility.
Segment reporting shows that the cryptocurrency mining segment generated only $47,727 in revenue but had positive EBITDA of $65,997 due to low cost of revenue. The sales of energy segment reported negative EBITDA of -$1.68M, likely reflecting power purchase costs exceeding sale prices during curtailment. Colocation services EBITDA was -$1.46M. The Tier III AI segment had no revenue yet. Stock-based compensation totaled $1.35M ($0.65M for stock options and $0.70M for RSUs). The company held 166 Bitcoin (cost $14.31M, fair value $11.43M) and 1,013 Ethereum (cost $3.01M, fair value $2.13M). As of March 31, 2026, there were 3,050,130 stock options outstanding and 2,954,279 RSUs. Warrants classified as liabilities totaled 1,744,374 with a fair value of $2.08M. No dividends were paid. The company did not engage in any share repurchases. Off-balance sheet arrangements were none.