LAS VEGAS - Ault Alliance, Inc. (NYSE American: AULT), a diversified holding company, has announced a significant increase in its revenue for the first quarter ended March 31, 2024, alongside improvements in various financial metrics.
The company reported a 55% rise in total revenue, reaching $44.9 million, up from $28.9 million in the same quarter of the previous year. Notably, this figure excludes approximately $3 million from Ault Global Real Estate Equities, Inc. (AGREE), as these assets were classified as discontinued operations.
Ault Alliance's digital assets mining segment saw a 56% increase in revenue to $11.4 million. Its lending and trading activities also experienced a turnaround, recording revenues of $9.1 million compared to a negative $4.9 million in the prior year's first quarter.
Gross margins improved significantly to 43%, up from 9%, and operating expenses decreased by 41% to $19.1 million. These changes contributed to an income from operations of $0.4 million, a substantial improvement from the $29.9 million loss in the same period last year.
The company's total assets were valued at $299.8 million as of March 31, 2024. Furthermore, net income available to common stockholders was reported at $2.5 million, a stark contrast to the $48.9 million net loss in the previous year's first quarter.
Milton "Todd" Ault III, Founder and Executive Chairman of Ault Alliance, expressed optimism about the company's direction, citing positive income from operations across three main segments. He cautioned, however, that future quarters might see fluctuations due to factors such as Bitcoin volatility and the evolving AI industry.
Sentinum, Inc., one of Ault Alliance's business segments, has invested heavily in a Michigan data center, which currently has a capacity of approximately 30 megawatts but could potentially expand to 300 megawatts with necessary approvals and funding. The company plans to finance this expansion primarily through debt to minimize equity issuance.
While the company's Fintech segment has seen, and expects to continue to see, fluctuations in profitability, Ault Alliance remains focused on its long-term strategy of growing its core businesses and seizing emerging opportunities. Mr. Ault projected that by the end of 2027, assuming successful leasing and upgrading of the Michigan data center, revenues could exceed $500 million with gross margins over 50%, primarily driven by Sentinum's data center operations.
InvestingPro Insights
Ault Alliance, Inc. (NYSE American: AULT) has shown impressive revenue growth in the first quarter of 2024, yet it's important for investors to consider a comprehensive financial picture. InvestingPro data highlights a market capitalization of $11.8 million for Ault Alliance, underscoring its position in the market. Despite the positive revenue growth, the company's P/E ratio stands at -0.08, indicating that it is not currently profitable. Additionally, Ault Alliance's Price / Book multiple is at 0.27, which might suggest the stock is undervalued relative to its assets.
InvestingPro Tips reveal that Ault Alliance operates with a significant debt burden and may have trouble making interest payments on its debt, which is particularly relevant as the company plans to finance the expansion of its Michigan data center through debt. The company's stock has experienced a strong return over the last month, with a 29.08% increase, yet it's noteworthy that the stock has faced a significant decline over the past year, with a 99.85% decrease in its total return. These metrics are crucial for investors considering the volatility and long-term performance of Ault Alliance's stock.
Investors looking for a deeper analysis on Ault Alliance can find additional InvestingPro Tips to aid in their investment decisions. For instance, there are 17 more InvestingPro Tips available for Ault Alliance at https://www.investing.com/pro/AULT. These tips can help investors understand the nuances of the company's financial health and market position. To access these insights, investors may use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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