Soluna Holdings posted a notable rise in first-quarter revenue, boosted primarily by expanding data center hosting services. The company’s revenue climbed 58% year-over-year to $9.4 million, marking its fourth consecutive quarter of growth. Data center hosting accounted for $6.7 million, overtaking cryptocurrency mining, which generated approximately $2.2 million as Bitcoin mining profitability waned.
The increase in hosting revenue came from additional capacity at Soluna’s Dorothy and Kati facilities in Texas, reflecting a strategic pivot amid challenging market conditions for crypto mining. While revenue improved slightly from the previous quarter by 2%, mining revenue declined from nearly $3 million a year earlier, highlighting tightening earnings in the sector following the recent Bitcoin halving and price drops. Market reports indicate a growing number of miners operating at a loss, especially those reliant on older, less efficient machinery.
Despite higher revenue, Soluna continued to operate at a net loss of $17.9 million, widening from $10.5 million the previous year due to increased stock-based compensation, interest, and financing expenses. The adjusted EBITDA loss narrowed somewhat to $2.1 million, suggesting modest operational improvements. The company also held $68.6 million in cash by quarter’s end as it invested in expanding infrastructure, including plans to bolster its artificial intelligence (AI) and high-performance computing offerings.
This shift at Soluna reflects a broader industry trend where cryptocurrency miners diversify into AI and cloud infrastructure to offset diminishing mining margins. Other publicly traded miners, such as HIVE Digital Technologies and TeraWulf, have also redirected resources towards AI computing. Analysts foresee companies like IREN generating most future revenue from AI infrastructure rather than digital asset mining, supported by partnerships like IREN’s long-term agreement with Microsoft.