HIVE Digital Technologies Ltd. (HIVE) Q2 2027 earnings review
HIVE finances its Cohere AI chips, but mining losses widen
HIVE Digital Technologies, which runs hydroelectric data centers for Bitcoin mining and artificial intelligence, is growing its AI unit while its larger crypto business faces tougher economics. Total revenue edged down 3% from a year ago to $85 million as lower Bitcoin prices cut mining sales, though AI computing revenue jumped 71% to $9 million, matching what last quarter's live run rate pointed to by our math. Chief executive Aydin Kilic also announced a $129 million loan that finishes paying for the chips needed for its Cohere AI contract.
| Total revenue | $84.9M -2.7% from a year ago, +7.3% from last quarter |
|---|---|
| AI and high-performance computing revenue | $8.8M +70.7% from a year ago |
| GPU Cloud annualized revenue | $40M live $185M contracted ($35M and $180M last quarter) |
| Year-end GPU Cloud annualized outlook | Unchanged $200M target for Q4 calendar 2026 |
⚖️ Verdict: ⚪ Neutral
The story is unchanged because solving the funding for one AI contract was offset by a late shipping schedule and ongoing share dilution. Securing the $129 million loan eases the biggest funding worry on the Cohere deal, yet those chips will only ship near the end of December, so live annualized AI revenue sits at $40 million against $185 million under contract. One caution: the company sold another 14 million shares at $3.15 and took a $31 million write-down on mining gear.
The question now is how quickly the $145 million of unbilled AI contracts turns into cash flow without further share dilution. Either the two British Columbia chip clusters deploy smoothly and lift quarterly AI revenue several-fold, or shipping delays and undisclosed funding for the second contract keep HIVE reliant on Bitcoin mining and stock sales. Next quarter's live annualized AI revenue and financing disclosures for the second cluster will tell.
🐂 Bull Case
HIVE Financed Its Cohere Cluster
HIVE signed two large artificial intelligence contracts last quarter, but it had not shown how it would pay for the graphics processing units (GPUs, the specialized chips that run AI). Chief executive Aydin Kilic said a new $129 million loan covered the first contract: "With our recent $129 million financing to fund the GPU purchase for our three-year agreement with Cohere and Bell, our capital commitments for the 2,304 GB200 GPU cluster were satisfied as of September 30, 2026."
Securing the loan removes the biggest hurdle for the three-year, $225 million agreement with Bell AI Fabric supporting Cohere, a Canadian AI company. The Canadian data center operator still has not detailed the loan's interest rate or explained how it financed the second major contract, a five-year, $350 million deal for 2,016 newer GB300 chips.
What to watch: the full quarterly filing's debt footnote and any financing announcement for the 2,016 GB300 cluster. Clear loan terms on the second cluster would show the company can fund its AI contracts without heavy share sales.
New Manitoba Chips Lifted AI Sales 71%
BUZZ, the subsidiary that rents AI computing power to businesses, is growing now that its first wave of newer Nvidia B200 chips is running in Manitoba, Canada. High-performance computing sales reached $8.8 million, up 70.7% from a year ago and 25.3% from last quarter.
That result matched the $8.75 million quarterly pace implied by our math from last quarter's $35 million live annualized run rate (ARR, current revenue multiplied across a full year). Live GPU Cloud ARR rose by $5 million to $40 million, and total contracted ARR — which includes signed deals not yet in service — reached $185 million, because customer demand and rental prices on chip marketplaces stayed strong.
What to watch: high-performance computing revenue in the December quarter. A rise above $10 million would show the existing chip fleet is holding its rental rates before the large new clusters come online.
🐻 Bear Case
Mining Costs and Write-Downs Hit the Base
"Our digital infrastructure platform combines established Bitcoin mining operations with a growing AI computing business," executive chairman Frank Holmes said, framing the mining side as a resilient cash engine. Yet Bitcoin mining revenue fell 7.4% from a year ago to $76.0 million as a 27% drop in Bitcoin prices outweighed higher coin production in Paraguay.
- Operating and maintenance costs (mostly electricity): 63.1% of revenue, up 12.6 percentage points from a year ago
- Gross operating margin (revenue minus direct cash costs): 35.6%, down 13.0 percentage points from 48.6% a year ago
- Mining equipment write-down: $31.2 million charge due to "challenging Bitcoin mining economics and lower market values for ASIC equipment"
- Depreciation expense: $54.9 million, up 20.8 percentage points of revenue from a year ago
The crypto miner did improve its gross operating margin by 5.0 percentage points from last quarter because Bitcoin network difficulty eased from 135 trillion to 128 trillion, letting it mine 1,070 coins versus 1,004. Even so, the $31.2 million equipment write-down and the $78.7 million net loss show that older mining machines are losing value faster than expected while power bills take a larger share of sales.
What to watch: gross operating margin in the third quarter. A drop back below 30% would mean Bitcoin mining cannot generate enough cash to cover overhead while the AI data centers are being built.
AI Chips Will Ship Late in the Quarter
HIVE wants its $185 million of contracted GPU Cloud ARR to turn into actual revenue quickly, and it still targets $200 million of ARR by the fourth quarter of calendar 2026. Today, only $40 million of that figure is live and billing customers, while the remaining $145 million sits in two large contracts waiting for equipment.
Kilic said the 2,304 GB200 chips for the Cohere contract "will ship before calendar year-end, after which the lender's funds will be released from escrow to the GPU OEM as milestones are met." Meanwhile, HIVE is already paying rent on the Merritt, British Columbia facility where those chips will go, which pushed selling, general and administrative overhead up 37.2% from a year ago to $10.7 million.
If the chips only ship from the manufacturer near the end of December, installing and testing them will likely push customer billing into calendar 2027. HIVE also gave no shipping date for the 2,016 GB300 chips under its other big contract, and noted its $200 million target remains "subject to financing, market conditions, deployment schedules and customer acceptance."
What to watch: live GPU Cloud ARR at the end of December, not contracted ARR. If live ARR stays near $40 million, the company will pay another quarter of Merritt facility rent without the matching contract revenue.
HIVE Keeps Selling Shares at $3.15
Even after borrowing $245 million via exchangeable notes in the first quarter and securing the $129 million GPU loan, HIVE continues to fund itself by issuing new stock. During the quarter, the company sold 13.7 million common shares through its at-the-market equity program at an average price of $3.15 per share, raising $43.2 million before $1.3 million in commissions.
Those sales, along with $8.6 million in quarterly stock-based compensation, pushed the diluted share count up 20.1% from a year ago to 274.1 million. Because each new share reduces an existing investor's claim on future AI revenue, ongoing equity sales at $3.15 weigh on per-share results before the new GPU clusters start earning money.
What to watch: quarterly at-the-market share sales in the December quarter. Continued issuance above 10 million shares now that the Cohere cluster is financed would show the rest of the build-out still requires equity dilution.
Risks this quarter didn't answer
Several standing financial, legal and pipeline risks received no new answers or binding commitments in the earnings release.
- Swedish tax dispute: an $84.5 million current liability for contested value-added tax sits on the balance sheet, with no update on appeal timing or potential cash enforcement.
- Big Boden colocation: the 32-megawatt Sweden project ($45 million potential annual revenue) is still only a letter of intent "subject to definitive agreements, investment requirements and execution."
- Toronto and New Brunswick pipeline: the 320-megawatt Greater Toronto Area Gigafactory and the $700 million 2028 HPC target remain uncontracted and unfunded, with no permit or tenant updates.
- Customer concentration: two agreements still account for $145 million of the $185 million in contracted GPU Cloud ARR.
- Canadian tax assessment and Paraguay power rates: the release gave no update on the Canada Revenue Agency tax dispute or post-2026 Paraguay electricity tariffs.
👓 Other Themes
US Data Center Pushback Aids Canada
Executives said political resistance and permitting delays in the United States following the mid-term elections could restrict new US data center supply. By contrast, Ontario released a data center playbook in August 2026 and its Premier's office committed to approving sites "sooner rather than later," which Kilic and BUZZ president Craig Tavares said supports HIVE's 400 megawatts of earmarked Canadian utility load.
💲 Other KPIs
Up 78.3% from $83.0 million last quarter and nearly triple the $53.6 million balance in March 2026. Over the first six months of the fiscal year, HIVE paid $91.0 million in equipment deposits as it locked in hardware for its upcoming AI computing clusters and Paraguay power expansion.
Down from $219.3 million last quarter, consisting of $139.0 million in cash and $22.6 million in digital currencies. By our math from the six-month cash flow statement, HIVE generated $8.1 million in operating cash flow this quarter but spent $85.2 million on property, equipment and hardware deposits, funded by cash on hand and $41.6 million in net share sales.
Rebounded 84.6% from $13.4 million last quarter, reaching 29.2% of revenue, though still down 21.3% from $31.5 million a year ago. The figure removes non-cash charges from the $78.7 million GAAP net loss, including $54.9 million of depreciation, the $31.2 million mining equipment write-down, $8.6 million of stock compensation and a $7.3 million derivative loss.
🔮 Guidance
Unchanged. The plan targets $200 million of annualized GPU Cloud revenue by the end of calendar 2026. By our math, that requires $15 million on top of today's $185 million contracted total, or $160 million on top of today's $40 million live total. HIVE missed its calendar 2025 target of $100 million by 80%, and reaching $200 million in live revenue this December looks unlikely because the Cohere chips only ship near year-end.
Unchanged. The company still plans to expand its operating power capacity by 22.7% from 440 megawatts today to 540 megawatts in the fourth quarter of calendar 2026 when a 100-megawatt power purchase agreement in Yguazú, Paraguay comes online. Management has not yet decided whether to use the extra 100 megawatts for Bitcoin mining or AI workloads.
Unchanged. Management kept its longer-term goal of $700 million in annualized high-performance computing revenue by the end of 2028. By our math, that leaves $500 million to come from data center colocation projects in Sweden, New Brunswick and Toronto after the $200 million GPU Cloud target. The company cautions this is not contracted revenue, and none of the colocation sites have binding leases or construction financing yet.
❓ Key Questions
How is the $350M GB300 cluster being financed?
Kilic confirmed a $129 million loan covers the 2,304 GB200 chips for Cohere, but said nothing about financing for the 2,016 GB300 chips under the five-year, $350 million enterprise contract. Investors need to know the loan terms for both deals.
When will the two Merritt GPU clusters start billing?
Because the GB200 chips are only scheduled to ship before calendar year-end, installation and testing will take additional time. Does the $200 million year-end ARR target measure live billing revenue in December or simply signed contracts?
When could Sweden enforce the $84.5M tax bill?
The $84.5 million provision for Swedish value-added tax assessments sits in current liabilities, meaning due within a year, while HIVE plans a 32-megawatt colocation expansion in Sweden. Management did not say whether tax authorities can seize cash or assets during appeals.
What is delaying the Big Boden colocation lease?
HIVE signed a letter of intent for its 32-megawatt Big Boden site in Sweden last quarter representing $45 million in potential annual revenue, but it still has not signed a binding contract or detailed how it will fund the retrofit.