American Bitcoin Corp. (ABTC) Q3 2026 earnings review
American Bitcoin halts stock dilution, but rising power costs force coin sales
American Bitcoin Corp., a Bitcoin miner controlled by Hut 8, posted a headline profit from higher coin prices while its actual mining business lost more money. Mining sales fell 5% from last quarter to $63 million as summer electricity rates pushed the direct cost to mine a coin up 15% to $42,100. Chief executive Mike Ho paused stock sales and grew Bitcoin per share by 5%, but the company had to sell over half of the 891 coins it mined to pay its operating bills.
| Mining revenue | $63.4M -5.5% from last quarter; -1.3% from a year ago |
|---|---|
| Operating result before coin revaluations | -$5.5M -$2.9M last quarter by our math |
| Bitcoin reserve (incl. 3,090 pledged) | 8,427 BTC +5.3% from last quarter; ~52% of Q3 mined coins sold |
| Strategic plan | Unchanged Qualitative focus on Bitcoin-per-share growth; no numerical targets |
⚖️ Verdict: 🔴 Bearish
The story got worse because rising power costs widened the mining loss and forced the company to sell most of its output once it stopped issuing stock. By our math, after including $29 million in equipment depreciation and $3 million in overhead, mining lost $6 million before paper coin revaluations, nearly double last quarter's loss. The good news: halting stock dilution let the remaining coins lift per-share holdings directly, and corporate overhead dropped by almost two-thirds.
The question now is whether the third-quarter cost jump was temporary summer heat or a permanent squeeze from data centers bidding up American power. If it was just summer weather, fourth-quarter mining costs will return near $36,500 per coin and let the company keep most of the Bitcoin it mines; if power competition is structural, unit costs will stay high and limit reserve growth. Fourth-quarter cost per coin and net reserve additions will tell.
🐂 Bull Case
Halted Stock Sales Protected Per-Share Coin Growth
American Bitcoin measures its progress in Satoshis per share, where one Bitcoin equals 100 million Satoshis. Chief executive Mike Ho said the miner grew that figure by about 5% "without issuing shares through our ATM program or purchasing Bitcoin during the quarter", referring to its at-the-market stock issuance arrangement.
In the first half of the year, the company sold stock to fund operations and buy coins, increasing its share count by 9% in the first quarter and 3% in the second. By our math, pausing stock sales kept the share count flat at about 72.8 million shares. That allowed the 5.3% increase in the coin reserve to flow straight through to each share, reaching 11,572 Satoshis per share.
What to watch: the statement of cash flows and share count in the quarterly filing. Those tables will show whether the pause in stock sales held after quarter-end or left cash balances too low to fund winter operations.
Overhead Costs Fell by Nearly Two-Thirds
General and administrative expenses, which cover corporate overhead and back-office management fees, dropped 64% from last quarter to $2.8 million. In the prior three quarters, that expense line ran between $6.9 million and $7.7 million.
By our math, overhead took 4.4% of revenue this quarter, down 7.1 percentage points from 11.5% in the second quarter. Stock-based compensation also fell by half to $0.4 million. The press release did not explain what drove the $4.9 million quarterly savings, which kept the operating loss before coin revaluations from widening further.
What to watch: the related-party footnote in the upcoming quarterly filing. Because majority owner Hut 8 provides management and back-office services, the filing will show whether Hut 8 reduced its recurring fees or gave a one-time credit.
🐻 Bear Case
Sold Over Half of Mined Bitcoin to Pay Bills
In previous quarters, American Bitcoin retained its mined coins and paid its cash bills by selling new shares to equity investors. This quarter, the company stopped issuing stock and instead "Sold a portion of Bitcoin production to cover operating costs while continuing to build the Company’s strategic Bitcoin reserve", the company said.
- Bitcoin mined in Q3: about 891 coins
- Bitcoin added to the reserve: about 425 coins, with zero market purchases
- Mined Bitcoin sold by our math: about 466 coins, or 52% of quarterly production
- Estimated cash raised from coin sales by our math: about $33.1 million at the $71,100 average revenue per coin
This shift matters because the business cannot grow its reserve at the pace of its mining output without outside cash. By our math, selling 466 coins at average prices raised about $33 million, which did not even cover the $40.3 million of cash production and overhead costs before equipment replacement. The quarterly reserve increase slowed to 425 coins, down from 981 in the second quarter and 1,620 in the first.
What to watch: fourth-quarter net reserve additions against quarterly mining production. Selling more than half of production again when winter power prices ease would confirm that mining cash flow alone only lets the company keep under half of what it mines.
Mining Lost Money After Depreciation as Power Costs Rose
Chief executive Mike Ho said the company "continued mining Bitcoin at a structural discount to spot", and co-founder Eric Trump highlighted $126 million in net income "particularly in a challenging digital asset market". However, that net income came entirely from a $197.3 million accounting revaluation on existing Bitcoin holdings.
In the actual mining operation, higher seasonal electricity costs pushed the direct cost to mine one Bitcoin up 15.3% from last quarter to $42,100, while revenue per coin slipped 1.1% to $71,100. Cost of revenue — the electricity and site hosting fees paid to run the machines — jumped 8.5 percentage points to 59.2% of sales, pulling gross margin down from 49.3% to 40.8%.
Once you include $28.6 million of equipment depreciation and $2.8 million of corporate overhead, all-in cost reached $77,285 per coin by our math. That exceeded the $71,100 market price realized during the quarter, leaving the mining operation with a $5.5 million operating loss before coin revaluations, wider than last quarter's $2.9 million loss.
What to watch: fourth-quarter cost to mine per Bitcoin. If unit power costs do not fall back toward $36,500 after summer heat passes, rising competition for American electricity is permanently squeezing mining profits.
Over One-Third of the Bitcoin Reserve Remains Pledged
American Bitcoin reported a strategic reserve of 8,427 Bitcoin at the end of September. Footnote two notes that this total "Includes ~3,090 Bitcoin pledged for miner purchases under agreements with BITMAIN", the equipment manufacturer.
By our math, 36.7% of the reserve is locked up as collateral for mining machines already bought, leaving 5,337 unencumbered coins, or 7,329 Satoshis per share instead of the 11,572 headline figure. Inaddition, the company reported $220.8 million in profit before interest, taxes, depreciation and one-offs (Adjusted EBITDA). That calculation kept the $197.3 million paper gain on rising Bitcoin prices, but added back the $64.3 million loss on the derivative contracts tied to the pledged Bitmain coins.
What to watch: the digital assets and derivatives footnotes in the quarterly filing. Those disclosures will show the updated liability owed to Bitmain and whether the company must pledge more coins to settle its 2026 machine purchases.
Risks this quarter didn't answer
Four standing operational and governance concerns received no new data in the third-quarter press release because the company did not include a balance sheet, cash flow statement, or capacity breakdown.
- Idle mining machines: total owned capacity stayed at 89,242 miners (28.1 exahashes per second), with no update on whether the 30,243 machines (3.1 exahashes) sitting unplugged in June have found a site.
- Expansion pipeline and the 2028 halving: no new miner orders or power sites were announced to grow capacity before the 2028 Bitcoin halving cuts network rewards in half.
- Dependence on majority owner Hut 8: the release gave no update on the $83.5 million owed to Hut 8 at mid-year or the hosting contract terms; the quarterly filing's related-party note will show the current balance.
- Finance leadership: the release named no permanent finance chief after the company appointed its second consecutive interim finance chief in August.
💲 Other KPIs
Production slipped 4.4% from last quarter's record 932 Bitcoin as summer power costs rose across mining sites. Against a year ago, when the company was still ramping up its fleet, output grew 58% by our math from about 563 coins. Third-quarter mining represented 21% of all coins the company has mined since its March 2025 launch.
Sales fell 5.5% from $67.0 million in the second quarter and dipped 1.3% from $64.2 million a year ago. Both volume and price pulled revenue down from last quarter: the company mined 41 fewer coins, and average revenue per coin mined edged down 1.1% from $71,900 to $71,100.
Total owned computing power — measured in exahashes per second (EH/s), or quintillions of calculations per second — remained unchanged at 28.1 EH/s across 89,242 machines for a third straight quarter. In the second quarter, only 25.0 EH/s of that fleet was plugged in and operating, and the third-quarter release did not update the active figure.
🔮 Guidance
Unchanged. American Bitcoin does not issue numerical revenue or profit targets, and chief executive Mike Ho reiterated its qualitative plan to mine at a discount to market prices and grow Bitcoin per share. While the goal held steady, the method shifted this quarter from selling stock to selling more than half of mined coins to pay operating bills.
❓ Key Questions
Why did overhead expenses drop by $4.9 million?
General and administrative expenses fell 64% from last quarter to $2.8 million. Because majority owner Hut 8 supplies back-office and management services, investors need to know if this drop reflects a permanent fee reduction or a one-time accounting credit.
What was the cash balance at the end of September?
The press release omitted the balance sheet and cash flow statement. With at-the-market stock sales paused and the company selling 52% of mined Bitcoin to cover costs, the cash balance shows how much liquidity buffer remains.
Have the 30,243 unplugged mining machines found a site?
At the end of June, 3.1 exahashes per second of owned mining computers sat non-operational. Management did not disclose active capacity this quarter, leaving unclear whether those machines are still idle and depreciating without generating revenue.
How will American Bitcoin settle the $371.7 million Bitmain liability?
About 3,090 Bitcoin remain pledged to Bitmain against past machine purchases. Investors need to know the redemption schedule and whether the company will surrender those coins permanently when the contracts mature in 2027.