HIVE

HIVE Digital Technologies Ltd. - 10-K Summary (Fiscal Year Ended March 31, 2026)

Business Context and Reporting Period

This Annual Report covers the fiscal year ended March 31, 2026. HIVE Digital Technologies Ltd. (HIVE) is a sustainable-energy focused digital infrastructure company operating in two primary segments: Bitcoin hashrate services and High-Performance Computing (HPC) for AI and graphics rendering. The company operates data centers in Canada, Sweden, and Paraguay, leveraging renewable hydroelectric power. During the period, HIVE transitioned its financial reporting from IFRS to U.S. GAAP and ceased to be a foreign private issuer, becoming subject to U.S. domestic issuer reporting requirements.

Key Financial Metrics

Note: The significant decrease in digital currency holdings is due to the strategic use of Bitcoin to pay for equipment deposits and purchases.

Material Changes vs. Prior Period

• Revenue Growth: Total revenue increased 158% year-over-year, driven by a 164% increase in digital currency mining revenue ($278.3M vs $105.2M) and a 94% increase in HPC hosting revenue ($19.5M vs $10.0M). This was fueled by a 104% increase in Bitcoin mined (2,885 BTC vs 1,414 BTC) and higher average Bitcoin prices.
• Net Loss Expansion: Despite revenue growth, the net loss widened significantly to $148.4 million from $3.0 million. This was primarily due to a $106 million increase in depreciation expenses ($170.4M vs $64.5M) resulting from massive capital expenditures, a $22.7 million loss on the change in fair value of derivatives (Bitcoin repurchase options), and a $16.0 million unrealized loss on investments.
• Hashrate Expansion: Installed hashrate grew from approximately 6 EH/s to over 25 EH/s, with a fleet efficiency of 16.1 J/TH. This was achieved through the completion of the 300 MW expansion in Paraguay (Yguazú and Valenzuela facilities).
• HPC Growth: HPC Annual Recurring Revenue (ARR) increased from $20 million to $35 million following the signing of a $30 million, two-year contract for 504 Nvidia B200 GPUs with Bell Canada.

Guidance, Outlook, and Risks

• Strategic Outlook: Management continues to pursue a "dual-engine" strategy, using cash flow from mining to fund HPC expansion. The company plans to upgrade its Toronto facility to Tier-III specifications and expand HPC capacity in Canada and Paraguay.
• Capital Markets: In April 2026 (subsequent to period end), HIVE issued $115 million in 0% exchangeable senior notes due 2031. The company also raised approximately $176 million through At-The-Market (ATM) equity programs during the fiscal year.
• Key Risks:
  • Tax Contingencies: The Swedish Tax Agency has assessed approximately $80.5 million in VAT liabilities against HIVE's Swedish subsidiaries. HIVE is appealing these decisions and has not accrued a liability, believing the claims are not probable.
  • Bitcoin Volatility: The company's profitability is highly sensitive to Bitcoin price and network difficulty. A significant price drop or difficulty increase could render operations unprofitable.
  • Energy Costs: Operations in Sweden and Paraguay face risks from energy price fluctuations and regulatory changes (e.g., tariff increases in Paraguay).
  • Hardware Obsolescence: Rapid advancements in GPU and ASIC technology require continuous capital investment to maintain efficiency.

Investor Verification Checklist

• Tax Dispute Status: Verify the current status of the Swedish VAT appeal and the potential impact of the $80.5 million assessment on future cash flows.
• Bitcoin Inventory Strategy: Confirm the rationale behind holding only 150 BTC on the balance sheet versus the historical trend of holding larger reserves, and the terms of the Bitcoin repurchase options used for equipment financing.
• HPC Contract Execution: Monitor the deployment timeline and revenue recognition for the $30 million Bell Canada contract and the 504 B200 GPU cluster.
• Debt Covenants: Review the terms of the new $115 million exchangeable notes and existing term loans to ensure compliance with debt service coverage ratios.
• Capital Expenditure Burn: Assess the sustainability of the $222.9 million cash used in investing activities against operating cash flow generation.