TECH - TAAL Distributed Information Technologies (TAALF) - 1Q21 Results
1Q21 Results. TAAL reported 1Q21 results late last week. Revenue totaled $963,988 and the Company recorded a net profit of $2.6 million, or $0.07 per share. (All figures are in Canadian dollars unless noted.) In the same period last year, TAAL reported revenue of $5.97 million and a net loss of $840,410, or a loss of $0.05 per share. We had projected revenue of $3.0 million and a net loss of $4.3 million, or a loss of $0.12 per share.One-time Gain Drove Positive Earnings. The positive earnings in 1Q21 were driven by a $2.5 million gain from the sale of a subsidiary. Other contributors to earnings were $2.9 million of digital asset revaluation gain and $2.0 million of gain from the sale of digital assets. This compares to a $1.8 million loss and a $0.14 million gain, respectively, last year. While these two will impact results, they are nearly impossible to predict with any accuracy and will depend on the value of the underlying cryptocurrency, mostly BSV.Mining Operations Drove Revenue. Although mining operations did not scale up as quickly as we had hoped, digital asset mining for its own account represented 92% of revenue. TAAL has decided to phase out its pooling operations so mining for its own account will drive revenue until we begin to see transaction processing revenue sometime next year. Notably, TAAL had 84,000 BitconSV in treasury as of May 25th.Updated Projections. Results will continue to be influenced by the price of bitcoin SV, which not only impacts the top line in terms of mining revenue but also any gain/loss on revaluation and gain/loss on the sale of digital assets. For the Second quarter, we are keeping our revenue at $6 million but reducing our estimate loss to $2.1 million, or $0.06 per share, from a previous projected loss of $3.5 million, or $0.10 per share.Maintaining Outperform. We are maintaining our Outperform rating and $6.00 12-month price target. We believe the Company's focus on using blockchain for transaction processing will bring long-term value, while crypto mining services provide near-term revenue and an option on rising prices for BitcoinSV. Read More >>