Bitfarms sees a 33% revenue rise, but profit margins shrink as post-halving mining costs escalate, tightening operational efficiency for the crypto miner
The mining margins experienced a significant decline after the April 2024 Bitcoin halving, despite Bitfarms’ robust top-line growth in the first quarter of this year. This was primarily due to the increasing production costs.
In the first quarter of 2025, Bitfarms disclosed its financial results, which indicated a 33% year-over-year increase in revenue to $67 million. Despite the revenue growth, the company’s gross mining margin decreased to 43% from 63% in the same period in 2024. This decline was attributed to increased production costs, which resulted in a 20-point decrease.
The total cash cost to produce one bitcoin increased significantly to $72,300, a significant increase from $27,900 a year prior. The direct production cost increased from $18,400 to $47,800, underscoring the pressure on margins as mining has become more costly following the halving of Bitcoin in April 2024.
The company’s operational hash rate increased from 6.5 EH/s a year ago to 19.5 EH/s as of March 31, 2025. In Q1 2024, the mining efficacy increased by 44% to 19 watts per terahash, from 34 watts per terahash. Bitfarms’ operational capacity increased to 461 megawatts from 240 megawatts during the same period last year. Nevertheless, the efficiency gains did not attenuate the broader increase in total production costs.
Despite a 33% increase in revenue, Bitfarms’s mining margins have been compressed due to the post-halving cost increase.
Since the April 2024 Bitcoin halving, Bitcoin producers have experienced declining margins. In the first quarter of this year, Hut 8 Corp. also experienced a substantial loss and a decline in revenue of over 50%. CEO Asher Genoot attributed this to the complete effect of the halving that is now in effect.
To counteract the decline in mining profitability, mining companies are transitioning to high-performance computation, and Bitfarms is following suit. To finance the construction of its HPC project at the Panther Creek site in Pennsylvania, the company obtained a $300 million private debt facility from a division of Macquarie Group during the quarter.
Other strategic developments during the quarter included the acquisition of Stronghold Digital Mining, which added two power campuses in Pennsylvania, and selling the Yguazu facility in Paraguay.