Hyperscale Data Reports 28% Revenue Decline, Net Loss in Q3 2024

Hyperscale Data, Inc. (formerly Ault Alliance, Inc.) reported significant financial changes in its 10-Q filing for the quarter ending September 30, 2024. The company experienced a substantial decline in revenue, with total revenue for the three months at $31.1 million, down 28% from $43.1 million in the same period of 2023. For the nine months ended September 30, 2024, total revenue was $87.2 million, a decrease of 16% compared to $104.2 million in the prior year. The decline was attributed to reduced revenues from crypto asset mining and commercial real estate leases, although there was a notable increase in revenues from lending and trading activities.

The company's gross profit for the three months ended September 30, 2024, was $8.5 million, slightly lower than $8.7 million in the same quarter of 2023. However, total operating expenses rose to $33.1 million from $29.1 million year-over-year, leading to a loss from operations of $24.6 million, compared to a loss of $20.4 million in the prior year. The net loss for the quarter was $29.6 million, slightly higher than the $28.1 million loss reported in Q3 2023.

For the nine-month period, the net loss was $58.2 million, a significant improvement from the $139.8 million loss in the same period of 2023. This improvement was largely due to a reduction in total operating expenses, which fell to $70.8 million from $121.2 million year-over-year. The company also recognized a $10.5 million impairment charge for crypto mining equipment in Q3 2024, reflecting increased mining difficulty.

Strategically, Hyperscale Data has undergone significant restructuring, including the deconsolidation of Gresham Worldwide, Inc. (GIGA) following its Chapter 11 bankruptcy filing in August 2024. This led to a recognized gain of $2 million from discontinued operations. The company has also been actively managing its capital structure, raising $22.6 million through financing activities in the nine months ended September 30, 2024, primarily from the sale of common stock and notes payable.

As of September 30, 2024, the company reported total assets of $231.5 million, down from $299.2 million at the end of 2023, with total liabilities increasing significantly to $196.4 million from $139.8 million. The company’s cash and cash equivalents stood at $7.2 million, with restricted cash of $8.3 million. Hyperscale Data continues to face challenges, including a negative working capital of $151.5 million and ongoing litigation matters that could materially affect its financial condition.