HIVE Digital: 'Cheap' Despite Explosive Revenue Growth

Summary HIVE Digital Technologies delivered explosive Q2 FY26 revenue growth but remains heavily reliant on Bitcoin mining for over 90% of revenue. Despite scaling mining capacity, HIVE posted a net loss in the quarter and continues to face sector-wide profitability challenges. HIVE trades at a discount to peers based on valuation metrics, but dilution and missed capital-raising opportunities temper enthusiasm for the stock. Given weak mining profitability and smaller relative AI/HPC exposure, I downgrade HIVE to 'hold' and see it as a speculative play on potential Bitcoin rallies. In the 2 months since I last covered HIVE Digital Technologies ( HIVE ) for Seeking Alpha, it has been a wild ride for shareholders, to say the least. Following a massive 100% rally in the stock from the publishing of that article to mid-October, HIVE has almost entirely retraced that rally and is now up roughly 5% since early September: Data by YCharts While HIVE is still generally trailing other companies in the sector, judging by the performance in the CoinShares Bitcoin Mining ETF ( WGMI ), it is well ahead of Bitcoin over these last 2 months. With the company having just released its latest earnings report, it's time to reassess if there is still a reason to be bullish on HIVE. Q2 FY26 Earnings For the quarter ended September, HIVE reported $87.3 million in top-line revenue. This was an explosive quarter with year-over-year growth of 285% and sequential growth of 91.3%: Quarter Ended 9/30/24 6/30/25 9/30/25 YoY QoQ Revenue From Mining $20,765 $40,797 $82,073 295.2% 101.2% Revenue From HPC $1,883 $4,814 $5,180 175.1% 7.6% Total Revenue $22,648 $45,611 $87,253 285.3% 91.3% Source: HIVE Digital, Revenue in 000s While the percentage growth for HPC revenue was impressive at 175%, it was dwarfed by the growth in revenue from mining in both aggregate and percentage terms. At $5.2 million in revenue from high-performance compute, HIVE's HPC segment made up a little under 6% of the company's total revenue in the quarter. Calendar Year Quarterly Revenue Breakout (HIVE, Analyst's Chart) While 6% is still a larger percentage of HPC revenue than most of the other Bitcoin ( BTC-USD ) miners-turned-HPC providers in the public markets, it's actually the lowest level of HPC revenue share for HIVE Digital in the last 6 quarters. You can see in the chart above, HIVE Digital had previously grown HPC revenue as a share of total revenue for 5 consecutive quarters. Even for a company that has indeed grown revenue from HPC, HIVE is still a Bitcoin mining company if the top line is any indication. Thus, it's likely problematic that during a quarter when Bitcoin's price was never lower than it is as of article submission (November 18th, 2025), HIVE Digital still couldn't generate a positive net income: Data by YCharts During the quarter ended September, HIVE reported a $15.8 million net loss after taxes. But to get a better sense of the actual health of the underlying business in the quarter, we can strip out things like gains/losses on investments, digital asset holdings, and derivatives: Revenue $87,253 Operating and maintenance costs -$44,065 High-performance computing service fees -$784 Depreciation -$38,292 Selling, general and administrative expenses -$7,800 Foreign exchange gain $601 Stock-based compensation -$5,472 Adjusted income/loss -$8,559 Source: HIVE Digital, Revenue in 000s Even if we took out the $5.5 million in stock-based compensation, HIVE Digital still lost over $3 million in the quarter. Some of this is likely due to HIVE accelerating its ASIC depreciation as part of its Paraguay expansion. But I still don't think it gets any easier from here, given what is happening to the price of Bitcoin and the impact those price declines are having on mining Hashprice: Bitcoin Hashprice 1yr Trend (HashrateIndex) As of article submission, mining profitability just hit a new 52-week low of $37.5 per PH/s. More than a 52-week low, though, this is both a halving epoch low and an all-time low in mining profitability. I think this is critically important for shareholders to understand because it highlights why so many miners are pivoting to HPC. I recognize that I've made these points before. But we now have public miners who are leaving the business entirely. This should theoretically limit the growth of global exahash. Data by YCharts Yet so far, it's the smaller companies that are leaving mining entirely. The bigger players are often accelerating their hash growth. For instance, HIVE is guiding for 25 EH/s by the end of November. For a company that had just 5 EH/s this time last year, scaling this production capacity has been incredible to watch. The problem is, it hasn't been a good enough reason to own HIVE stock. Balance Sheet and Dilution Where I'll give HIVE some credit is here; they've seemingly put what was a 2,800 BTC stack at the beginning of the year to good use in 2025. At the end of September, HIVE reported holding just 210 BTC and $22.6 million in cash/equivalents. To the degree that it has been able to do so, HIVE has utilized its Bitcoin holdings to fund its capex growth: Data by YCharts At the end of September, HIVE had $693 million in total assets against just $68.4 million in total liabilities. With shareholder equity of just under $625 million and 228 million shares outstanding, HIVE had a book value of $2.74 per share at the end of the quarter. It should be noted that HIVE's losses have generally been funded by shareholder dilution: Data by YCharts Over the last 5 years, HIVE shares outstanding grew by 243%. This is substantially lower than many of HIVE's sector peers, and it's important to point that out. But still, dilution should be an expectation when holding this stock for longer than a quarter or two. From where I sit, the dilution is forgivable when it is done strategically. Which is why I find it interesting that the company wasn't tapping the ATM aggressively when the stock traded above $5 for several weeks between early October and early November. Per the company's recent quarterly filing , HIVE issued an additional 3.6 million shares subsequent to the end of September, but just 523k of those shares came from the ATM. If HIVE needed to tap the ATM again before the end of the calendar year 2025, it feels like the company missed an opportunity to raise capital at a heightened share price last month, with the stock now trading well below $4 per share. Valuation Through my work on Seeking Alpha in recent years, I've made it no mystery that I don't generally like Bitcoin miners, fundamentally speaking. But buying these stocks for swing trades is something that does appeal to me in certain scenarios. I like buying the stocks when I think they're trading at a discount to peers if I feel the discount is unwarranted. Mining Stock Valuations (Seeking Alpha) At a price-to-book ratio of 1.3, a price-to-sales ratio of 3.2, and a Seeking Alpha valuation grade of "A-," I think you could argue HIVE is cheap relative to peers. Especially considering I'd put HIVE closer to TeraWulf ( WULF ) or IREN Limited ( IREN ) as true peers given its dwindling BTC stack and HPC footprint. HIVE has prioritized scaling over HODLing like TeraWulf and IREN have, yet it trades at multiples more similar to CleanSpark ( CLSK ) or Riot Platforms ( RIOT ). The question is whether or not HIVE is undervalued or if WULF and IREN are overvalued—I'm currently leaning towards the latter. Closing Takeaways HIVE is not a ticker that I think has properly benefited from AI hype like some of its peers. Which could work to HIVE's advantage if the AI mania in markets starts to unwind, as it shouldn't fall nearly as far as IREN or WULF based on valuations. It could also work to HIVE's advantage if Wall Street's AI mania continues since the stock could rally higher as the company monetizes its GPUs for HPC. Execution is certainly important in these names. And I think the apparent lack of ATM usage in October was a missed opportunity to raise capital. Mining profitability broadly remains putrid, so even if you decide to take a flier on the company, I wouldn't personally fall in love with HIVE as long as more than 90% of revenue comes from mining. Having said all this, there are worse ways to play a potential dead cat rally in Bitcoin than HIVE. But since I think we've seen the highs in Bitcoin's price for this halving cycle, I'm going to downgrade the stock to a 'hold' at this time.