BitFuFu Inc. — FY2023 Form 20-F
Reporting period: Fiscal year ended December 31, 2023. This is an annual report, not a standalone Q4 filing; the supplied filing text does not provide a clear Q4-only financial result. Financial statements are prepared under U.S. GAAP and audited by WWC, P.C.
Business context
BitFuFu provides cloud-mining and miner-hosting services and mines Bitcoin for its own account. It reported 22.9 EH/s of mining capacity and access to approximately 515 MW of hosting capacity at year-end. In 2023, cloud-mining generated 62.7% of revenue and self-mining 35.2%. The company completed its SPAC business combination on February 29, 2024, after the reporting period; its shares began trading on Nasdaq on March 1, 2024.
Key financial metrics
| Metric (US$ unless noted) | 2023 | 2022 |
|---|---|---|
| Revenue | $284.1 million | $198.2 million |
| Gross profit / margin | $12.7 million / 4.5% | $36.2 million / 18.3% |
| Operating income | $16.6 million | $3.9 million |
| Net income | $10.5 million | $2.4 million |
| Adjusted EBITDA (non-GAAP) | $41.7 million | $39.6 million |
| Net cash from operating activities | $(196.0) million | $(7.4) million |
| Cash from investing activities | $176.9 million | $56.7 million |
| Cash and cash equivalents at year-end | $32.0 million | $60.4 million |
| Total assets / liabilities | $210.0 million / $192.7 million | $198.3 million / $191.5 million |
At December 31, 2023, digital assets were $44.0 million, primarily Bitcoin, and equipment net of depreciation and impairment was $81.9 million. Long-term payables for mining equipment were $102.4 million, unsecured, bearing 3%–6% interest and due June 30, 2025. The company also owed related party Bitmain $30.2 million for hosting services. Interest expense was $5.5 million in 2023.
Operating cash flow was substantially negative in part because a large share of revenue and costs was settled in digital assets; the cash-flow statement reports $212.9 million of net digital assets provided by operating activities. Investing cash flow mainly reflected net proceeds from digital-asset sales and exchanges. These noncash and digital-asset movements make reported cash generation materially different from net income.
Material changes versus 2022
- Revenue rose 43.3%, led by cloud-mining revenue growth of 79.1% to $178.0 million and self-mining revenue growth of 66.2% to $100.2 million.
- Gross profit fell to $12.7 million and gross margin contracted to 4.5% from 18.3%. Management attributed the decline mainly to lower cloud-mining margins from competitive pricing and suspension of higher-margin equipment sourcing activity.
- Self-mining output increased to 3,577 BTC from 2,825 BTC, while the reported self-mining breakeven point increased to approximately $28,200 per BTC from $21,500. Management cited higher network difficulty and temporary miner suspensions related to weather, power curtailments, and relocations.
- The company suspended mining-equipment sales, leasing, and sourcing services in 2023 as it shifted focus toward cloud mining. Digital-asset impairment declined to $7.0 million from $12.9 million; there was no new FTX-asset or mining-equipment impairment charge in 2023.
- Cash declined by $28.4 million during 2023. Prepayments to suppliers rose materially, to $34.0 million, and contract liabilities increased to $47.7 million.
Outlook, commentary, risks and unusual items
- Outlook: The filing gives no quantified revenue or earnings guidance. Management expects year-end cash, anticipated operating and financing cash flows, and proceeds from the business combination to cover ordinary working-capital and capital needs for 12 months after closing; it also expects continued investment in miner fleets and expansion.
- Business-combination funding: Following approximately $25.4 million of public-share redemptions, the company received approximately $1.0 million of gross proceeds from the business combination and raised $74 million through PIPE financing. It reported approximately $93.8 million of unaudited pro forma cash and cash equivalents as of December 31, 2023 after giving effect to the transaction and PIPE.
- Bitcoin and operating exposure: Results depend on Bitcoin prices, mining difficulty, block rewards, network transaction fees, power availability and cost, and equipment economics. The Bitcoin reward halved to 3.125 BTC on April 20, 2024, after year-end.
- Concentration: Bitmain accounted for 61% of 2023 cost of revenue and 84% of hosting costs. The largest customer contributed 15% of revenue; the top three contributed 26%.
- Digital assets and unusual items: The company recorded $18.2 million of realized gains on digital-asset sales and $7.0 million of digital-asset impairment in 2023. In 2022, it fully impaired $9.8 million of assets held at FTX; those assets remained impaired at year-end 2023. The accounting policy treats digital assets as indefinite-lived intangible assets and does not permit reversal of impairment losses.
- Contingencies: Ethereal Singapore is defending a lawsuit over an alleged discounted sale of its claim against FTX’s bankruptcy estate. A separate warrant-exercise dispute was raised after year-end; the company disputes the alleged breach and says the outcome cannot yet be predicted. The filing does not provide a clear estimate of potential loss for these matters.
- Controls and governance: Management said a material weakness in financial reporting controls, involving insufficient personnel with U.S. GAAP expertise, was remediated by year-end 2023. The auditor did not attest to internal-control effectiveness. CEO Leo Lu controls 82.8% of ordinary shares and 96.0% of voting power through the dual-class structure.
Most important facts for investors to verify
- Whether cloud-mining growth can produce a recovery in gross margin after the 2023 decline, and how pricing and supplier costs are developing.
- Cash conversion and liquidity, including the scale and timing of digital-asset receipts, supplier prepayments, and repayment of the $102.4 million equipment payable due in 2025.
- Continuing dependence on Bitmain for hosting and related-party services, and whether alternative suppliers and hosting capacity are being secured.
- Bitcoin holdings, impairment exposure, mining economics after the 2024 halving, and the assumptions behind the reported self-mining breakeven level.
- Developments in the FTX-claim lawsuit and warrant dispute, and any subsequent changes in potential exposure or recoveries.
- Post-combination cash actually available, PIPE registration and potential share resales, and dilution or voting implications of the dual-class shares and outstanding warrants.