Bitfarms Share Buyback Signals Undervalued Stock

Bitfarms' Share Buyback Program

Bitcoin mining company Bitfarms has made a significant move by announcing a share buyback program, which allows for the repurchase of up to 49.9 million common shares, accounting for 10% of its public float, within the next 12 months. The Toronto Stock Exchange (TSX) has given its approval for the buyback program, which will cover repurchases on both the TSX and Nasdaq. Following the announcement on Tuesday, Bitfarms' shares on Nasdaq closed up by 16.8%.

The buyback program has set a daily purchase limit on TSX at 494,918 shares, or 25% of the average daily trading volume over the past six months. On the Nasdaq, the total repurchases cannot exceed 5% of outstanding shares during the program period. Bitfarms will pay the market price for the shares throughout the buyback period, starting from July 28, 2025, and ending on July 27, 2026. All repurchased shares will be canceled, reducing the total number of outstanding shares and potentially increasing the value of shares held by investors.

Bitfarms' Business Strategy

CEO Ben Gagnon expressed confidence in Bitfarms' business and stated that the share buyback reflects the belief that the company's stock is currently undervalued. Gagnon highlighted Bitfarms' focus on high-performance computing (HPC) and AI data centers as key growth drivers. The company's energy portfolio in Pennsylvania has been identified as a significant factor contributing to its expansion.

Founded in 2017, Bitfarms operates 15 Bitcoin mining data centers across the US, Canada, Argentina, and Paraguay. As the company transitions from Bitcoin mining to powering AI applications, it is also expanding its presence in the United States to mitigate potential trade war impacts. This strategic pivot aligns with a broader trend in the industry, where mining companies are leveraging existing infrastructure for HPC to boost revenue following the 2024 Bitcoin halving.

Financial Performance and Strategic Moves

In the first quarter of 2025, Bitfarms reported a $36 million net loss, compared to a $6 million net loss in the same period of 2024. The company's gross profit margin declined year-over-year to 63% from 43%, indicating the impact of the Bitcoin halving on miners' profitability. Despite these challenges, Bitfarms secured a $300 million credit line from Macquarie to expand its HPC facility in Pennsylvania and sold its Paraguay mining site to Hive Digital for $85 million.

Gagnon emphasized the company's progress in executing its strategic pivot towards the US and HPC, stating, "During the quarter, we executed across several key areas in our strategic pivot to the US and HPC." In 2025, Bitfarms mined 693 BTC at an average direct cost of production per BTC of $47,800, positioning itself for continued growth and innovation in the evolving landscape of cryptocurrency and AI technologies.