Summary WhiteFiber reported strong 48% YoY revenue growth but swung to an operating loss due to surging G&A expenses post-spinout. WYFI's cloud services dominate revenue, while Q2's spike in expenses was driven by share-based compensation, salaries, and consulting fees. At an 11.5x forward sales multiple, WYFI is priced for growth. Interestingly, Bit Digital offers exposure to WYFI and ETH at a discount. I initiate WYFI with a cautious 'buy' rating, preferring BTBT as a value proxy until WYFI's stock price settles down. Back in August, Bit Digital ( BTBT ) spun out its HPC/AI subsidiary business, WhiteFiber ( WYFI ), through an IPO at $17 per share. The company recently released its first quarterly report as a standalone public entity for the three months that ended June 2025. The market likes what it sees, with shares eclipsing $28 on September 19th. In this initial coverage of WYFI, we'll look at that earnings report, equity valuation, and assess whether investors should consider WYFI shares over BTU shares. Q2 Earnings 3 Months Ended June 2025 2024 YoY Revenue $18,662,249 $12,589,701 48.2% COGS -$7,201,168 -$4,595,301 56.7% Depreciation/Amortization -$5,140,713 -$4,322,291 18.9% General & Admin -$15,476,832 -$1,261,489 1126.9% Total Opex -$27,818,713 -$10,179,081 173.3% Loss From Operations -$9,156,464 $2,410,620 -479.8% Source: WhiteFiber 10-Q For the quarter ended June 2025, WhiteFiber reported $18.7 million in top-line revenue. This was a 48% year-over-year increase for the quarter and a 70% increase for the first half of 2025 over H1 2024. Notably, COGS grew faster than Revenue and G&A exploded year-over-year by 1,100% in Q2. 6 Months Ended 2025 2024 YoY Revenue $35,423,511 $20,759,033 70.6% COGS -$13,818,011 -$7,752,628 78.2% Depreciation/Amortization -$8,970,357 -$7,203,818 24.5% General & Admin -$19,754,485 -$2,458,408 703.5% Total Opex -$42,542,853 -$17,414,854 144.3% Loss From Operations -$7,119,342 $3,344,179 -312.9% Source: WhiteFiber 10-Q I think the most telling thing in these tables is the fact that WhiteFiber has actually flipped from a profitable operator in the first half of 2024 to one that lost over $7 million through the first half of 2025. That loss is entirely attributable to an expensive Q2, as WhiteFiber was profitable in Q1. Breaking out the revenue by segment, the overwhelming majority of WhiteFiber's revenue comes from cloud services, with that segment accounting for $16.6 million, or 91% of the company's top line: $ in Millions Q1-25 Q1-24 YoY Cloud Services $16.6 $12.5 32.8% Co-location $1.7 $0.0 N/A Cloud % of Total 90.7% 100.0% Source: WhiteFiber 10-Q Last year the company didn't have a co-location segment and acquired one through the purchase of Enovum for about $46 million. The cloud services segment uses leased GPUs to support generative AI applications. COGS Breakout (WhiteFiber 10-Q) That said, GPU lease expense actually came down in the quarter. From where I sit, the biggest operational expense shareholders should keep an eye on going forward is the G&A. The large spike in general and administrative expense in Q2 was due to $6.5 million in share-based compensation, $1.3 million in salaries and bonuses, as well as $5.7 million in consulting expenses. Balance Sheet and Valuation Shifting to the balance sheet, at the end of the quarter, WhiteFiber had $16.4 million in cash and $50.3 million in current assets. The company's equity was mainly derived from its property, plant and equipment of $230 million: WhiteFiber Assets (WhiteFiber 10-Q) Keeping in mind that the IPO happened after this quarter ended, WYFI likely has roughly $200 million in cash and equivalents as of article submission. Total Liabilities came in at $78.3 million at the end of June, with nearly $38 million of those liabilities being non-current lease liabilities. We'll get a better sense of the company's balance sheet position in the next report. But given Bit Digital's balance sheet management history, I would assume WhiteFiber is in good financial shape. Data by YCharts If we look at Bit Digital's valuation through an annualized P/S multiple, the company is now trading in line with 'AI/HPC' peers like CoreWeave ( CRWV ) or Core Scientific ( CORZ ). At an 11.5x forward sales multiple, the company is clearly priced for growth. There's certainly nothing wrong with that. And frankly, I think WYFI is one of the market's better AI/HPC pure plays. However, for those who want WYFI at a cheaper entry, there may be an alternative stock that makes more sense today. Bit Digital Ownership After spinning out WhiteFiber through IPO, Bit Digital retained the overwhelming majority of WYFI shares. Currently, Bit Digital owns about 71.5% of WYFI shares. What I find so interesting about the post-earnings explosion in the price of WYFI is that it isn't benefiting BTBT at all so far. Data by YCharts In fact, over the last month, WYFI shares are up by almost 50%, while BTBT shares have appreciated by less than 8%. This would perhaps be understandable if Bit Digital's WYFI position wasn't a large component of the company's total assets. Yet, the opposite is true: Bit Digital Holdings Units Unit Value Total Value Ethereum 121,252 $4,484.58 $543,764,294 WYFI Shares 27,043,750 $28.00 $757,225,000 Combined value $1,300,989,294 Not only does Bit Digital hold more WYFI than it does Ethereum ( ETH-USD ) at current prices for each asset, but at a $1 billion market capitalization, BTBT shares are trading at nearly a 30% discount to the ETH and WYFI that shareholders of BTBT would own. Factoring in the $181 million in cash and $90 million in total liabilities Bit Digital had at the end of Q2, buying BTBT instead of WYFI is almost like acquiring WYFI and cash and getting the ETH nearly for free. Closing Summary I think WYFI is a great trading asset at this point because it has a relatively low float and has been very volatile in its brief trading history. I have held WYFI in the past and will likely hold it again in the future. Fundamentally, I'd like to see the company return to operational profitability before getting overly exposed in a direct investment position. For me, the spike in G&A expense is a concern and something to watch in future earnings reports. Today, I like the idea of holding BTBT as a WYFI proxy because I'm getting the WYFI shares and the ETH for less than market value. I'm going to initiate WYFI with a cautious 'buy' recommendation. But again, I'm planning to wait for this post-earnings moonshot to settle down before I have any significant direct position.
