American Bitcoin Swings to $126 Million Quarterly Profit on Bitcoin Gains, Grows Reserve to 8,427 BTC

Bitcoin miner American Bitcoin (NASDAQ: $ABTC), a majority-owned subsidiary of Hut 8 (NASDAQ: $HUT) co-founded by Eric Trump, reported third-quarter net income of about $126 million on Wednesday, helped by a $197 million non-cash gain on its bitcoin, while mining revenue and margins slipped.

The profit came from bitcoin’s price, not the mining business. Revenue fell about 5% from the second quarter and gross margin dropped to 41% from 49% as seasonal power costs rose, yet the company grew its bitcoin holdings 5% without buying coins or selling shares.

According to the press release, American Bitcoin swung to net income of $126 million from a net loss of $57.2 million in the second quarter, and adjusted EBITDA reached about $221 million after an adjusted EBITDA loss of $45.0 million. A $197.3 million gain on digital assets, against a $71.2 million loss last quarter, drove the swing, offset in part by a $64.3 million loss on derivatives, which was a gain of $18.3 million the quarter before.

Mining revenue was about $63.4 million, down from $67.0 million, as American Bitcoin mined 891 bitcoin compared with 932. Cost of revenue rose to about $37.5 million, gross profit fell to $25.8 million from $33.0 million, and the cost to mine a bitcoin climbed to about $42,100 from $36,500, which the company blamed on seasonal power costs. General and administrative spending dropped to $2.8 million from $7.7 million.

The company held about 8,427 bitcoin at the end of September, up roughly 425 from 8,002 at the end of June, including about 3,090 pledged under agreements with Bitmain for miner purchases. Satoshis per share, its measure of bitcoin attributable to each share, rose about 5% to 11,572. All of the growth came from mining, and the company sold a portion of its production to cover operating costs. The 5% gain is slower than the 14% increase in the second quarter and the 30% rise in the first, when the company was adding to its reserve more actively.

CEO Mike Ho said the company kept mining “at a structural discount to spot” and noted it neither issued shares through its at-the-market program nor bought bitcoin during the quarter. Eric Trump, the company’s chief strategy officer, called the results significant in a challenging market and said American Bitcoin sits at the intersection of bitcoin and American energy.

American Bitcoin’s owned fleet totaled about 89,242 miners with roughly 28.1 exahashes per second of capacity at quarter-end.

Its shares closed down 5.6% at $6.24 on Wednesday before the results.