Executive Summary / Key Takeaways

• Strategic Vertical Integration: Bitdeer is aggressively executing a vertical integration strategy, developing proprietary, energy-efficient ASIC mining rigs (SEALMINER series) and expanding its global, diversified energy infrastructure to achieve significant cost advantages and control over its Bitcoin mining operations.
• Technological Leadership in ASICs: The company's roadmap for SEALMINER A3 (targeting 10 J/TH chip efficiency) and the groundbreaking A4 (targeting 5 J/TH chip efficiency) positions it to be a leading supplier of the world's most energy-efficient mining machines, a critical differentiator in the post-halving era.
• Dual Growth Engine: Bitcoin Mining & HPC/AI: Bitdeer is rapidly scaling its self-mining hashrate, targeting 40 EH/s by October 2025, while simultaneously pivoting significant power capacity, notably at its 570 MW Clarington, Ohio site, towards high-growth High-Performance Computing (HPC) and Artificial Intelligence (AI) data center opportunities.
• Improving Financial Trajectory with Strategic Investments: While Q1 2025 saw revenue and gross profit pressure from the Bitcoin halving and substantial R&D investments, Q2 2025 demonstrated record revenue of $155.6 million, significantly driven by external SEALMINER sales, validating the vertical integration thesis and signaling future revenue diversification.
• Robust Infrastructure & Liquidity: With over 1.8 GW of power capacity expected by year-end 2025 and strategic financing facilities, Bitdeer possesses the foundational assets and capital flexibility to fund its ambitious expansion plans and technological roadmap.

The Vertically Integrated Future: Bitdeer's Strategic Blueprint

Bitdeer Technologies Group (NASDAQ:BTDR) is carving out a distinctive position within the dynamic cryptocurrency mining and high-performance computing (HPC) sectors. The company, which became public in 2023, has strategically evolved beyond traditional Bitcoin mining, embracing a comprehensive vertical integration model. This strategy encompasses the entire value chain, from designing and manufacturing its own advanced ASIC (Application-Specific Integrated Circuit) mining rigs to developing and operating a globally diversified energy infrastructure. This integrated approach aims to deliver significant cost advantages, enhanced capital efficiency, and greater control over its growth trajectory, setting it apart in an industry increasingly defined by technological prowess and operational scale.

The broader cryptocurrency mining industry is undergoing a profound transformation, driven by the imperative for modernization and efficiency, particularly in the wake of the April 2024 Bitcoin halving event. This event, which reduced block rewards, intensified the focus on operational costs and hardware efficiency. Concurrently, the burgeoning demand for high-performance computing, fueled by the rapid advancements in Artificial Intelligence (AI), presents a parallel, high-growth opportunity for companies with substantial power and data center assets. Bitdeer's strategic pivot directly addresses these converging trends, positioning it as a technology company for both blockchain and HPC.

Bitdeer's competitive standing is strengthened by its integrated model, which offers a more comprehensive solution compared to many pure-play miners. While competitors like Marathon Digital (MARA) and Riot Platforms (RIOT) have aggressively scaled their mining capacity, Bitdeer's in-house ASIC development and end-to-end operational control provide a unique competitive moat. The company's global footprint, with operations spanning the United States, Norway, Bhutan, and Singapore, offers geographic diversification and access to varied energy sources, potentially enhancing resilience against regional disruptions. This strategic depth allows Bitdeer to be "market-based in its decisions," optimizing the allocation of its proprietary mining rigs between self-mining and external sales based on prevailing market conditions.

The Technological Edge: SEALMINER ASICs and Beyond

At the heart of Bitdeer's vertical integration strategy lies its proprietary SEALMINER ASIC technology, a critical differentiator in the race for mining efficiency. The company has meticulously laid out an ambitious product roadmap, aiming to deliver industry-leading performance. The SEALMINER A1 series, with 3.7 exahash per second (EH/s) of mass production completed and energized by April 2025, marked an important initial step.

The subsequent SEALMINER A2 series, powered by the proprietary SEAL02 chip, is on track for mass production of 35 EH/s by October 2025. The A2 Pro series, available in both air-cooled and hydro-cooled models, boasts an impressive power efficiency of 14.9 Joules per Terahash (J/TH). This efficiency is a tangible benefit, directly translating to lower operational costs per Bitcoin mined, a crucial factor in the post-halving environment. By April 2025, 1.3 EH/s of A2s had been sold and shipped to external customers, with an additional 0.5 EH/s deployed for Bitdeer's self-mining operations. The initial external demand for the A2s was robust, with pre-orders for the 7 EH/s allocated for external sale being oversubscribed by a factor of six.

Looking further ahead, Bitdeer's R&D efforts are concentrated on its next-generation chips. The SEALMINER A3, featuring the SEAL03 chip, targets an industry-leading energy efficiency of 10 J/TH at the chip level, with mass production anticipated to commence in Q3 2025. The company's most ambitious project, SEALMINER A4, is targeting an unprecedented efficiency of approximately 5 J/TH at the chip level. This chip, slated for tape-out in Q4 2025, has been completely redesigned from the ground up, leveraging a new digital architecture and technology to significantly improve energy efficiency. These technological advancements are not merely incremental; they are designed to revolutionize Bitcoin mining ASICs, providing Bitdeer with a substantial competitive moat by enabling lower energy consumption and higher profitability per unit of hashrate.

Strategic Expansion: Powering Growth and Diversification

Bitdeer's technological advancements are complemented by an aggressive expansion of its energy infrastructure. The company commands a globally diversified power portfolio exceeding 2.6 gigawatts (GW), with nearly 1 GW scheduled for energization in 2025. By mid-2025, Bitdeer aims to bring online nearly 500 megawatts (MW) of new self-mining power capacity, increasing its total global capacity to approximately 1.6 GW. This expansion is strategically concentrated in regions like Norway and Bhutan, where over half of this new capacity is located, demonstrating the benefits of early geographic diversification. By the end of 2025, the company expects its total available power capacity to exceed 1.8 GW, including an additional 221 MW in Massillon, Ohio, and a new 50 MW site in Ethiopia.

A cornerstone of this infrastructure strategy is the acquisition of a 19-acre site near Foxcreek, Alberta, for $21.7 million in January 2025. This site is fully permitted for a 101 MW gas-fired power plant and a 99 MW grid interconnection, with energization expected by Q4 2026. This project is particularly significant as it positions Bitdeer as the "world's first fully vertically integrated Bitcoin miner at scale," aiming to achieve "one of the lowest Bitcoin mining costs in the industry" with estimated energy production costs ranging from $20 to $25 per megawatt-hour. The Alberta site also plans to implement a carbon utilization system for net-zero carbon production and offers the flexibility to sell power back to the grid during peak demand, enhancing cost-efficiency and grid stability.

Beyond Bitcoin mining, Bitdeer is strategically leveraging its robust power infrastructure for High-Performance Computing (HPC) and Artificial Intelligence (AI). In April 2025, the company paused Bitcoin mining-related construction at its 570 MW Clarington, Ohio site to explore HPC/AI opportunities, engaging Northland Capital Markets as a financial advisor in March 2025. This pivot underscores the company's recognition of the critical industry challenge posed by the shortage of reliable power for AI data centers. Bitdeer's NVIDIA (NVDA) DGX SuperPOD system in Singapore achieved approximately 98% utilization in September 2024, establishing its capabilities in advanced AI computing solutions. This dual-use strategy for its power assets offers significant revenue diversification and a potential reliable, high-margin revenue stream, mitigating the cyclical nature of cryptocurrency mining.

Financial Performance: Investing for Future Returns

Bitdeer's financial performance in Q1 2025 reflected the challenging post-halving environment and substantial investments in its strategic roadmap. Total revenue for Q1 2025 was $70.1 million, a 41.3% decrease from $119.5 million in Q1 2024. This decline was primarily driven by the April 2024 halving event, higher global network hashrate, and lower hosting and cloud mining revenue, alongside increased R&D costs related to the SEAL03 chip development. Consequently, gross profit turned negative at $3.2 million, resulting in a negative 4.6% gross margin, compared to a positive $34.1 million and 28.6% margin in Q1 2024. Operating expenses also rose to $75.8 million, largely due to $59.0 million in R&D costs for ASIC development and non-cash amortization from the FreeChain acquisition.

Despite these headwinds, Q2 2025 marked a significant turning point, with Bitdeer reporting record revenue of $155.6 million, a 56.8% year-over-year and 121.9% sequential increase. This surge was primarily driven by $69.5 million in revenue from the external sale of proprietary SEALMINER A2 rigs, validating the company's vertical integration thesis. The reported IFRS net profit for Q1 2025 was $409.5 million, largely due to non-cash derivative gains on convertible bonds and Tether warrants, which are fair value adjustments and do not impact liquidity. However, the Q2 2025 net loss of $147.7 million was also largely influenced by non-cash, fair value changes on derivative liabilities.

Liquidity and capital management remain central to Bitdeer's ambitious plans. The company ended Q1 2025 with $215.6 million in cash and cash equivalents and $131.1 million in cryptocurrencies.

In April 2025, Bitdeer secured a $200 million financing facility from Matrix Finance and Technology Holding Company, with approximately $90 million drawn as of the Q1 2025 earnings call. These loans are secured by SEALMINERs, providing a flexible financing mechanism for chip purchases. The company also completed an upsized US$330.0 million convertible senior notes offering in June 2025, further bolstering its financial position.

While the ATM facility was paused in February 2025 due to market conditions, reflecting a disciplined approach to managing dilution, the company's substantial prepayments to TSMC (TSM) for SEAL02 wafers ($190.6 million in Q4 2024) and inventory buildup ($64.9 million in Q4 2024) underscore the capital intensity of its ASIC development.

Outlook and Guidance: Accelerating Hashrate and Diversified Returns

Bitdeer's forward-looking guidance reflects its commitment to both scaling Bitcoin mining and diversifying into HPC/AI. The company is on track to achieve a self-mining hashrate of approximately 40 EH/s by October 2025, prioritizing the deployment of its A2 mining machines to its sites in Bhutan and Norway. This forecast does not include potential additional wafer allocations for SEAL02 or SEAL03, suggesting a possible upside to this target by Q4 2025. As the company approaches the 40 EH/s range, it expects its average fleet efficiency to improve significantly, dropping into the lower-20s (22 to 24 J/TH) from its current higher levels, with a long-term goal of reaching efficiencies in the teens as newer generation rigs are deployed and older, less efficient machines are phased out or relocated to lower-cost power regions like Ethiopia or Canada.

For 2025, Bitcoin mining infrastructure capital expenditures are projected to be in the range of $260 million to $290 million. This revised guidance represents an $80 million reduction from prior estimates, primarily due to the strategic decision to pause Bitcoin mining-related construction at the Clarington, Ohio site to explore HPC/AI opportunities. This CapEx guidance specifically excludes the cost of SEALMINERs used for self-mining. The Massillon, Ohio, 221 MW site and the Ethiopia site are both on track for energization by the end of 2025, contributing to the company's total available power capacity exceeding 1.8 GW.

The HPC/AI initiative at the 570 MW Clarington, Ohio site is a key strategic focus, with advanced discussions underway with development partners and potential end-users. Bitdeer.AI, the company's neo cloud business, achieved an annualized run-rate revenue (ARR) of US$8 million from AI cloud services in August 2025, with significant growth anticipated from Q4 2025. The company expects to transition towards more external sales of its advanced ASICs, particularly the A4 machines, as its internal self-mining capacity becomes fully utilized. The SEALMINER A2 and A2 Pro are currently priced at approximately $12.8 per exahash, with pricing expected to remain competitive and responsive to market dynamics.

Risks and Competitive Dynamics

Bitdeer operates within a highly competitive and volatile industry, facing several pertinent risks. The inherent cyclicality of Bitcoin prices and the impact of halving events directly affect revenue and profitability, as evidenced by the Q1 2025 performance. Increased global network hashrate continuously pressures mining economics, demanding relentless pursuit of efficiency. The capital-intensive nature of ASIC development and infrastructure build-out necessitates significant cash outflows, as seen in the substantial prepayments to TSMC. Market uncertainty and decreased demand for mining rigs could impact Bitdeer's ASIC manufacturing segment, potentially leading to inventory buildup and affecting financial health.

Supply chain disruptions, such as the Taiwan earthquake in January 2025 that delayed SEALMINER A2 production by a month, and the U.S. dock workers' strike in October 2024 that impacted the Rockdale, Texas hydro-cooling conversion, highlight the operational vulnerabilities. While trade negotiations have de-escalated tariffs, the evolving U.S. tariff policies and the uncertainty surrounding TSMC wafer allocation remain factors to monitor. Bitdeer's management, however, expresses confidence in its relationship with TSMC and its ability to adapt, including potentially migrating a portion of manufacturing to the U.S. in the second half of 2025.

In the competitive landscape, Bitdeer's vertical integration and proprietary ASIC technology are crucial differentiators. The company aims to secure market share through its technology and the stability of its mining rigs, offering transparent data to customers. While larger competitors like Marathon Digital and Riot Platforms have established scale, Bitdeer's focus on energy efficiency (e.g., A3 at 10 J/TH, A4 at 5 J/TH) is a key competitive advantage, particularly as energy costs become paramount. The strategic pivot to HPC/AI also diversifies its revenue streams, providing a hedge against Bitcoin mining volatility and tapping into a rapidly growing market where reliable power is a critical constraint. This dual strategy allows Bitdeer to leverage its assets for the "highest and best use" based on market conditions.

Conclusion

Bitdeer Technologies Group is executing a bold and transformative strategy, positioning itself as a vertically integrated powerhouse at the nexus of Bitcoin mining and high-performance computing. The company's relentless pursuit of technological leadership through its SEALMINER ASIC roadmap, targeting unprecedented energy efficiencies, is a compelling differentiator in a post-halving world where operational costs dictate survival. This technological edge, combined with a rapidly expanding and geographically diversified energy infrastructure, forms the bedrock of its long-term investment thesis.

While the immediate financial impacts of the Bitcoin halving and substantial R&D investments presented challenges in early 2025, the record revenue generated from external SEALMINER sales in Q2 2025 underscores the validation of its vertical integration strategy. The strategic pivot towards HPC/AI, particularly with the Clarington, Ohio site, further enhances Bitdeer's resilience and opens new avenues for high-margin revenue growth. Investors should recognize that Bitdeer's journey is one of strategic investment and disciplined execution, aiming to unlock significant value by becoming a leading supplier of energy-efficient mining rigs and a critical infrastructure provider for the burgeoning AI economy. The company's ability to consistently deliver on its ambitious hashrate targets and technological advancements will be paramount in solidifying its competitive position and driving sustained shareholder returns.