Bit Digital's Q3 Revenue Exceeds Expectations Amidst Crypto Market Downturn, Shares Decline
Bit Digital Inc. recently unveiled its financial outcomes for the third quarter of 2025, revealing revenues that surpassed analysts' predictions. However, despite this positive top-line performance, the company's stock experienced a decline in the wake of the announcement. The firm has been actively reorienting its business model to concentrate on Ethereum-related activities, a move supported by considerable gains in digital assets and a burgeoning revenue stream from its cloud and staking services.
For the third quarter, Bit Digital reported revenues totaling $30.5 million, marking a substantial 33% increase from the $22.8 million recorded in the same period last year, and slightly outperforming the analyst consensus of $30.3 million. The company achieved a net income of $146.7 million, translating to a GAAP earnings per share of 0.47 cents, which represents a significant turnaround from the $38.8 million loss incurred in the previous year. Nevertheless, the adjusted earnings per share showed a loss of 5 cents, falling short of the estimated 1-cent loss. This profitability surge was largely fueled by $146.0 million in digital asset gains, which also propelled adjusted EBITDA to $166.8 million, a dramatic improvement from a $19.7 million loss in the prior year.
An analysis of the company's business segments reveals diverse performances. Revenue generated from digital asset mining saw a 27% decrease, settling at $7.4 million. This reduction was primarily due to an increase in Bitcoin network difficulty and a strategic decrease in the company's hash rate as it scaled back its mining footprint. Bit Digital's Bitcoin production fell to 64.9 BTC from 165.4 BTC in the previous year, yet this segment maintained a healthy 32% gross margin with an operational hash rate of 1.9 EH/s. In contrast, cloud services demonstrated robust expansion, with revenue climbing by 48% to $18.0 million. Furthermore, the introduction of colocation services in late 2024 contributed an additional $1.7 million. Ethereum staking revenue witnessed a remarkable surge, reaching $2.9 million, a significant increase from $0.4 million year-over-year, indicating the company's growing Ethereum holdings and increased engagement in staking activities.
The third quarter also marked the full integration of WhiteFiber Inc., which successfully launched its IPO on August 8, 2025. Bit Digital's ownership stake in WhiteFiber amounted to 27,043,750 shares, representing approximately 70.7% of the company, valued at about $734.8 million as of September 30. The incorporation of WhiteFiber is poised to strengthen Bit Digital's overarching strategy for cloud and AI-related infrastructure. WhiteFiber, however, reported third-quarter 2025 revenues of $20.18 million, missing the $22.03 million projection, and recorded a net loss of 47 cents per share, which was wider than the anticipated 7-cent loss. Despite year-over-year revenue growth, particularly in cloud and colocation services, and gross margins nearing 60%, heightened operating and public company expenditures exerted pressure on the financial results.
Bit Digital's balance sheet at the end of the quarter reflected a strong cash position of $179.1 million, an increase from $95.2 million at year-end. The value of its digital assets also grew significantly, from $161.4 million to $423.7 million. The company accelerated its acquisition of Ethereum, holding 122,187 ETH by September 30 and further increasing this to 153,547 ETH by October 31. In October, Bit Digital allocated proceeds from its $150 million convertible notes offering to purchase 31,057 ETH. Staking operations expanded consistently, with 644.3 ETH earned from native staking and 52.9 ETH from liquid staking during the quarter. By September 30, approximately 99,936 ETH were actively staked, yielding an annualized return of 3.05%, which further rose to 132,480 ETH by the close of October. Sam Tabar, the CEO of Bit Digital, highlighted the quarter's achievements in reinforcing the company's position at the confluence of Ethereum and artificial intelligence, aiming to build one of the largest and most efficient ETH treasuries among publicly traded entities, driven by increasing institutional adoption and the maturity of the staking ecosystem.
The financial disclosures coincided with a period of heightened instability in the cryptocurrency markets. Bitcoin briefly dipped below $96,000, triggering liquidations of over $1 billion in leveraged positions across major cryptocurrencies like Ethereum, XRP, and Dogecoin. Analysts attributed this sharp market correction to a cascade of liquidations and excessive leverage within the futures markets. While these market fluctuations are distinct from Bit Digital's operational fundamentals, the general market downturn contributed to a broader risk aversion sentiment within digital asset equities. Concurrently, Bit Digital's shares saw a 6.35% decrease to $2.36, and WhiteFiber's stock declined by 15.5% to $16.80 in premarket trading.