Digi Power X Inc. (NASDAQ:DGXX) shares are trading higher Friday after the AI data center operator reported mixed third-quarter results, pairing a surprise profit with a revenue shortfall.
- Digi Power X shares are climbing with conviction. Why are DGXX shares rallying?
Profit Beat Offsets Revenue Miss
Digi Power X posted third-quarter earnings of 1 cent per share, topping the analyst consensus estimate for a loss of 13 cents per share. Quarterly revenue of $12.25 million came in below the Street estimate of $14.64 million but rose 50% from $8.15 million in the year-ago period and climbed 85% sequentially.
Net income reached $1.0 million, up from $0.1 million a year earlier. The company noted the bottom line was materially helped by gains on digital currency holdings and warrant valuations. EBITDA came in at $6.5 million, while adjusted EBITDA was $0.6 million, compared with $1.7 million and negative $1.0 million, respectively, in the prior-year quarter.
AI Revenue Now Nearly Half the Business
AI revenue totaled $5.66 million in the quarter, more than quintupling from the second quarter and accounting for 46% of total revenue. Digi Power X generated no AI revenue in the year-ago period. GPU rental revenue grew 127% sequentially to $2.46 million.
The company’s Columbiana colocation contracts represent roughly $402 million in Phase 1 contract value over an initial 10-year term, and up to about $1.07 billion across both phases. Tenant access and commissioning for Phase 1 are expected on Dec. 15, with billing slated to begin in January 2027. Phase 2 construction is underway, with tenant access targeted for March 2027.
$300 Million Run-Rate Target Hinges on Financing
Digi Power X ended the quarter with $119.6 million in cash, cash equivalents and digital currencies, $103.0 million in working capital and no outstanding borrowings. The company expects to close a proposed $200 million credit facility syndicated by Goldman Sachs in the fourth quarter, subject to definitive documentation.
Looking ahead, management anticipates an annualized revenue run-rate of approximately $250 million to $300 million by the end of the third quarter of 2027, contingent on adequate financing and market conditions.
Planned 2027 capital expenditures of about $350 million are expected to be funded mainly through customer deposits and contract-backed debt, an approach the company said is designed to limit shareholder dilution.
Digi Power Shares Surge
DGXX Price Action: Digi Power shares are up 3.62% at $2.29 at the time of publication on Friday, according to Benzinga Pro.
Image created using artificial intelligence via Midjourney.
