TECH - TAAL Distributed Information Technologies (TAALF) - 2Q Results In-Line with Expectations
2Q21 Results. TAAL reported 2Q21 results yesterday. Revenue totaled $6.7 million and the Company reported a net loss of $10.1 million, or $0.29 per share. (All figures are in Canadian dollars unless noted.) In the same period last year, TAAL reported revenue of $1.6 million and a net loss of $2.4 million, or a loss of $0.11 per share. We had projected revenue of $6.0 million and a net loss of $2.1 million, or a loss of $0.06 per share.Revaluation Impacted Bottom Line. While revenue grew from an increase in mining machines on-line, overall results were negatively impacted by an $8.8 million revaluation loss on digital assets, as the holdings of Bitcoin SV were marked to market at quarter's end. Excluding this non-cash charge, operating loss is estimated at $1.3 million. At the end of June, TAAL held approximately 100,900 Bitcoin SV.Network Scaling. Increasing numbers of large blocks are being mined on the BSV network. Holding more transactions and data is resulting in transaction fees exceeding the block subsidy reward, a key element of the TAAL strategy. In July TAAL earned 371 BSV from transaction processing fees and 737 so far in August, up from 105 and 138, in May and June, respectively. 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 third quarter, we are keeping our revenue at $8 million but reducing our loss estimate to $700,000, or $0.02 per share, from a previous projected loss of $775,000, or $0.02 per share. For the full year we are projecting revenue of $26.7 million and a loss of $0.19 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 Bitcoin SV. Read More >>