Greenidge Generation Holdings Inc. (GREE): Business Model Canvas [11-2024 Updated]

Greenidge Generation Holdings Inc. (GREE) stands at the intersection of energy and cryptocurrency, leveraging a unique vertically integrated business model that combines power generation with Bitcoin mining. With strategic partnerships and a robust infrastructure, GREE is not only a player in the energy market but also a significant player in the digital currency landscape. Discover how this innovative company is reshaping the future of sustainable mining operations and energy production in our detailed analysis below.

Greenidge Generation Holdings Inc. (GREE) - Business Model: Key Partnerships

Hosting agreements with NYDIG, Conifex Timber, and Core Scientific

Greenidge Generation Holdings Inc. has established significant hosting agreements to optimize its datacenter operations. The key agreements include:

• NYDIG Hosting Agreement: Initiated on January 30, 2023, this agreement allows Greenidge to provide datacenter hosting services. Revenue generated from this agreement for the nine months ended September 30, 2024, was approximately $22.2 million, compared to $28.7 million in the same period in 2023.
• Conifex Timber Agreement: This partnership allows Greenidge to utilize renewable power for hosting services, contributing to its sustainability goals.
• Core Scientific Agreement: Although the hosting agreement was terminated on May 31, 2024, it initially allowed Core to host Greenidge-owned miners. The miners previously hosted by Core were redeployed to Greenidge-owned sites to enhance profitability.

Partnership	Revenue (9M 2024)	Revenue (9M 2023)
NYDIG	$22.2 million	$28.7 million
Conifex Timber	Not disclosed	Not disclosed
Core Scientific	Not applicable (terminated)	Not applicable (terminated)

Contracts with Empire Pipeline for natural gas transportation

Greenidge relies on Empire Pipeline for the transportation of natural gas, which is essential for its power generation operations. The facility in New York has a nameplate capacity of approximately 106 megawatts. This strategic partnership ensures reliable fuel supply, which is critical for minimizing operational costs.

Collaboration with Atlas Holdings as a controlling shareholder

Atlas Holdings is a significant stakeholder in Greenidge, facilitating access to additional resources and strategic guidance. In April 2024, Greenidge acquired a parcel of land in Columbus, Mississippi, from a subsidiary of Atlas for $1.45 million, enhancing its operational capabilities by providing access to 32.5 megawatts of additional power capacity. This collaboration strengthens Greenidge’s operational infrastructure and market positioning.

Transaction	Details	Amount
Acquisition of Land	Columbus, Mississippi	$1.45 million
Power Capacity	Newly acquired land	32.5 megawatts

Greenidge Generation Holdings Inc. (GREE) - Business Model: Key Activities

Operating cryptocurrency datacenters in New York and Mississippi

As of September 30, 2024, Greenidge operates approximately 29,200 miners with a combined capacity of approximately 3.1 EH/s across its datacenters. This includes 18,200 miners associated with datacenter hosting (1.8 EH/s) and 11,000 miners dedicated to cryptocurrency mining (1.3 EH/s).

Mining Bitcoin and providing hosting services

In the three months ended September 30, 2024, Greenidge generated $3.3 million in cryptocurrency mining revenue, reflecting a 51% decrease compared to $6.6 million in the prior year. The number of bitcoins produced from cryptocurrency mining was 53, down from 235 the previous year. The average cost to mine one bitcoin during this period was $49,038, with a value of each bitcoin mined at $61,642.

Metric	Q3 2024	Q3 2023	Variance
Cryptocurrency Mining Revenue	$3.3 million	$6.6 million	-51%
Bitcoins Produced	53	235	-77%
Cost to Mine One Bitcoin	$49,038	N/A	N/A
Value of Each Bitcoin Mined	$61,642	N/A	N/A

Selling electricity to NYISO and engaging in engineering services

Power and capacity revenue for the three months ended September 30, 2024, was $2.6 million, a 21% increase from $2.1 million in the same period the previous year. This increase was attributed to higher average power and capacity prices, which rose approximately 29%, despite an 8% decrease in sales volume. The total revenue from power and capacity for the nine months ended September 30, 2024, was $7.1 million, compared to $5.0 million for the same period in 2023.

Revenue Stream	Q3 2024	Q3 2023	Variance
Power and Capacity Revenue	$2.6 million	$2.1 million	+21%
Total Revenue (Nine Months)	$7.1 million	$5.0 million	+43%

Greenidge Generation Holdings Inc. (GREE) - Business Model: Key Resources

106 MW Power Generation Facility

The Greenidge Generation facility in New York has a nameplate capacity of approximately 106 megawatts (MW). This facility utilizes natural gas for power generation, contributing to its operational efficiency and lower market prices for electricity due to access to the Millennium Gas Pipeline price hub.

Approximately 29,200 Miners with 3.1 EH/S Capacity

As of September 30, 2024, Greenidge operates a fleet of approximately 29,200 miners with a combined hash rate capacity of approximately 3.1 EH/s (exahashes per second). The breakdown of these miners includes:

Vendor	Model	Number of Miners
Bitmain	S19	4,000
Bitmain	S19 Pro	2,000
Bitmain	S19j Pro	900
Bitmain	S19 XP	3,600
Bitmain	S19 Hydro	200
Bitmain	S21 Pro	300

The average efficiency of the miners ranges from approximately 15.0 to 34.0 J/TH with an average of 27.1 J/TH. The age of the miners varies from 0.1 to 3.1 years, with an average age of approximately 2.3 years .

Land and Facilities for Datacenter Operations

Greenidge operates datacenter facilities in various locations, including the New York Facility, Mississippi, and North Dakota. The total land owned includes approximately 153 acres in South Carolina, classified as held for sale, with a carrying value of $7.2 million. The Mississippi facility includes over 73,000 square feet of industrial warehouse space, providing access to an additional 32.5 MW of power capacity .

Recent developments include the entry into a hosting agreement with NYDIG, enhancing liquidity through reimbursement for key input costs and profit-sharing arrangements .

Greenidge Generation Holdings Inc. (GREE) - Business Model: Value Propositions

Vertically integrated model combining power generation and mining

Greenidge Generation Holdings Inc. operates a vertically integrated cryptocurrency datacenter and power generation facility, primarily located in the Town of Torrey, New York. The facility has an approximate capacity of 106 megawatts (MW) and generates all the power required for its operations using natural gas. This integration allows Greenidge to maintain control over its energy sources, reducing dependence on external suppliers and lowering operational costs.

Competitive pricing due to access to low-cost natural gas

The company benefits from competitive pricing structures owing to its access to the Millennium Gas Pipeline price hub, which provides relatively low market prices for natural gas. As of September 30, 2024, Greenidge reported total revenue of $12.35 million for the quarter, with significant contributions from datacenter hosting and cryptocurrency mining operations. The cost of revenue per MWh for datacenter hosting was $43, while for cryptocurrency mining, it was $53 . This pricing advantage is crucial for maintaining profitability in the highly competitive cryptocurrency market.

In-house expertise ensuring high operational uptime

Greenidge emphasizes in-house operational expertise to ensure high uptime of its mining operations. The company reported an adjusted operating loss of $9.3 million for the nine months ended September 30, 2024, a significant improvement compared to $15.7 million in the same period of 2023 . The operational uptime allows Greenidge to maximize production and revenue from its approximately 29,200 miners, collectively providing a hash rate of approximately 3.1 EH/s . Additionally, the company has taken measures to migrate miners from third-party hosting providers to its own facilities, which is expected to enhance profitability by reducing operational costs .

Metric	Value as of September 30, 2024
Electricity Generation Capacity	106 MW
Total Revenue	$12.35 million
Cost of Revenue per MWh (Datacenter Hosting)	$43
Cost of Revenue per MWh (Cryptocurrency Mining)	$53
Adjusted Operating Loss (Nine Months)	$9.3 million
Average Hash Rate (Total Miners)	3.1 EH/s
Number of Miners	29,200

Greenidge Generation Holdings Inc. (GREE) - Business Model: Customer Relationships

Direct relationships with major hosting customers

Greenidge Generation Holdings Inc. has established direct relationships with key hosting customers through its NYDIG Hosting Agreement initiated on January 30, 2023. This partnership allows Greenidge to generate revenue from a reimbursement fee covering power costs and direct management expenses associated with its mining facilities, along with a hosting fee and gross profit-sharing arrangement. In the first nine months of 2024, revenue from datacenter hosting amounted to $22.2 million, a decrease from $28.7 million in the same period of 2023, primarily due to the sale of the South Carolina Facility.

Period	Datacenter Hosting Revenue	Revenue Decrease	Reason for Decrease
Q1-Q3 2024	$22.2 million	$6.5 million	Sale of South Carolina Facility
Q1-Q3 2023	$28.7 million	-	-

Long-term contracts with energy providers

Greenidge's power and capacity revenue is generated from long-term contracts with energy providers, particularly through sales to the New York Independent System Operator (NYISO). In Q3 2024, power and capacity revenue increased by 43% to $7.1 million compared to the same period in 2023. This increase is attributed to higher average power prices and sales volume.

Period	Power and Capacity Revenue	Increase	Factors
Q3 2024	$7.1 million	$2.1 million	Higher average prices, increased sales volume
Q3 2023	$4.973 million	-	-

Engagement with mining pool operators for cryptocurrency rewards

Greenidge engages with mining pool operators to enhance its cryptocurrency mining operations. As of September 30, 2024, the company had a fleet of approximately 29,200 miners with a combined capacity of 3.1 EH/s. The company produced 793 bitcoins during this period, with an average bitcoin price of $60,028. The mining operations faced challenges due to increased global bitcoin mining difficulty, which rose by 72% year-over-year.

Metric	Value
Total Miners	29,200
Combined Capacity (EH/s)	3.1
Bitcoins Produced	793
Average Bitcoin Price	$60,028
Increase in Mining Difficulty	72%

Greenidge Generation Holdings Inc. (GREE) - Business Model: Channels

Direct sales to NYISO for power and capacity

Greenidge Generation Holdings Inc. generates revenue by selling power and capacity directly to the New York Independent System Operator (NYISO). The company earns revenue through three streams:

• Power revenue based on the hourly price of power.
• Capacity revenue for committing to sell power to the NYISO when dispatched.
• Ancillary service revenue for providing operating reserves.

For the nine months ended September 30, 2024, power and capacity revenue increased by $2.1 million, or 43%, totaling $7.1 million. This increase was attributed to higher average power and capacity prices, which contributed approximately 25% to the revenue growth, and an increase in sales volume by approximately 18%.

Hosting services marketed to third-party miners

Greenidge offers datacenter hosting services, which are marketed primarily to third-party cryptocurrency miners. The hosting agreement with NYDIG allows Greenidge to receive reimbursement fees that cover the costs of power and direct costs associated with managing the mining facilities, along with a gross profit-sharing arrangement. In the first nine months of 2024, datacenter hosting revenue was $22.2 million, down from $28.7 million in the same period in 2023, primarily due to the sale of the South Carolina facility.

As of September 30, 2024, Greenidge's datacenter operations included approximately 29,200 miners with a combined capacity of about 3.1 EH/s, of which 18,200 miners (1.8 EH/s) were associated with datacenter hosting.

Period	Revenue from Datacenter Hosting ($ million)	Average Active Hash Rate (EH/s)	Number of Miners
Q3 2024	6.5	1.7	29,200
Q3 2023	12.1	2.9	42,300
9 months 2024	22.2	-	-
9 months 2023	28.7	-	-

Cryptocurrency rewards distributed through digital wallets

Greenidge generates cryptocurrency mining revenue by earning bitcoin rewards and transaction fees through its network of ASIC miners. For the nine months ended September 30, 2024, cryptocurrency mining revenue was $15.0 million, a decrease of $2.0 million, or 12%, compared to the same period in 2023. This decrease was primarily due to an increase in the global bitcoin mining difficulty factor and the bitcoin halving that occurred in April 2024.

As of September 30, 2024, the average cost to mine one bitcoin was $36,414, with the value of each bitcoin mined being $57,628.

Metric	Q3 2024	Q3 2023
Total Bitcoins Produced	793	2,225
Average Bitcoin Price ($)	60,028	26,350
Average Active Hash Rate (EH/s)	790,142	882,130

Greenidge Generation Holdings Inc. (GREE) - Business Model: Customer Segments

Cryptocurrency miners needing hosting services

Greenidge Generation Holdings Inc. provides hosting services tailored to cryptocurrency miners. The company operates approximately 29,200 miners, with about 18,200 miners dedicated to datacenter hosting, yielding a combined capacity of approximately 1.8 EH/s. As of September 30, 2024, the average active hash rate for the hosted miners was 1.8 EH/s, allowing the company to manage mining operations effectively.

In the first nine months of 2024, Greenidge generated $22.2 million from datacenter hosting services, down from $28.7 million in the same period in 2023. This decline was primarily due to the sale of the South Carolina facility.

Metric	Value (2024)	Value (2023)	Change (%)
Revenue from Datacenter Hosting	$22.2 million	$28.7 million	-23%
Average Active Hash Rate (EH/s)	1.8 EH/s	2.1 EH/s	-10%
Total Miners	29,200	Not disclosed	N/A

Energy market participants requiring supplemental power

Greenidge also serves energy market participants by selling power and capacity to the New York Independent System Operator (NYISO). In the first nine months of 2024, the company reported power and capacity revenue of $7.1 million, an increase of 43% compared to $5.0 million in the same period in 2023.

The revenue increase was attributed to higher average power and capacity prices, which rose approximately 25% due to market conditions.

Metric	Value (2024)	Value (2023)	Change (%)
Power and Capacity Revenue	$7.1 million	$5.0 million	+43%
Average Power Price Increase (%)	25%	Not disclosed	N/A

Institutional investors interested in sustainable mining operations

Greenidge targets institutional investors through its commitment to sustainable mining practices, leveraging renewable energy sources for its operations. The company has entered into various hosting agreements, including a significant partnership with NYDIG that allows for cost reimbursements covering key input costs, while also providing profit-sharing opportunities.

For the nine months ended September 30, 2024, Greenidge's adjusted net loss from continuing operations was $14.6 million, a decrease of 42% from $25.1 million in the same period in 2023, indicating improved operational efficiency that may appeal to institutional investors.

Metric	Value (2024)	Value (2023)	Change (%)
Adjusted Net Loss	$14.6 million	$25.1 million	-42%
Percentage of Revenue from Hosting Services	50%	57%	-12%

Greenidge Generation Holdings Inc. (GREE) - Business Model: Cost Structure

Significant costs associated with electricity and natural gas

The total cost of revenue (exclusive of depreciation) for Greenidge Generation Holdings Inc. during the nine months ended September 30, 2024, was $30.9 million, a decrease of $5.3 million, or 15%, compared to the prior year period. This reduction was primarily influenced by several factors:

• Datacenter hosting costs were $16.6 million, down from $20.8 million (20% decrease).
• Cryptocurrency mining costs were $9.5 million, down from $10.6 million (11% decrease).
• Power and capacity costs were $4.6 million, down from $4.8 million (3% decrease).

The decrease in costs was attributed to higher natural gas costs for datacenter hosting, which was approximately 7% of the overall decrease, and a reduction in electricity utilization due to the sale of the South Carolina facility.

Operational costs for datacenter maintenance and miner upkeep

For the three months ended September 30, 2024, the operational costs were as follows:

Cost Type	2024 ($ in thousands)	2023 ($ in thousands)	Variance ($ in thousands)	Variance (%)
Datacenter Hosting	4,941	9,432	(4,491)	(48%)
Cryptocurrency Mining	2,599	4,458	(1,859)	(42%)
Power and Capacity	1,764	1,465	299	20%

Overall, the total cost of revenue (exclusive of depreciation) for the three months ended September 30, 2024, was $9.3 million, a decrease of $6.1 million, or 39%, compared to $15.4 million in the prior year.

Administrative expenses reduced by $9.3 million in 2024

In 2024, Greenidge reported a significant reduction in administrative expenses, which amounted to $13.4 million for the nine months ended September 30, 2024, down from $22.7 million in the prior year, marking a decrease of $9.3 million, or 41%. Key contributors to this reduction included:

• Payroll and benefits decreased by approximately $4.0 million.
• Professional fees and consulting expenses fell by about $2.9 million due to cuts in discretionary costs.
• Insurance expenses decreased by approximately $1.7 million as a result of lower coverage costs.

The overall restructuring and cost management efforts have led to a more streamlined operation, contributing to the reduction in administrative expenses.

Greenidge Generation Holdings Inc. (GREE) - Business Model: Revenue Streams

Revenue from Datacenter Hosting and Cryptocurrency Mining

Greenidge Generation Holdings Inc. generates significant revenue from datacenter hosting and cryptocurrency mining operations. In the nine months ended September 30, 2024, the company reported datacenter hosting revenue of $22.2 million, down from $28.7 million in the previous year, reflecting a decrease of 23%. The cryptocurrency mining revenue for the same period was $15.0 million, down from $17.0 million, a decline of 12%. The total revenue from these streams combined was $37.2 million for the first nine months of 2024.

As of September 30, 2024, Greenidge operates approximately 29,200 miners with a combined capacity of 3.1 EH/s for both datacenter hosting and cryptocurrency mining. The hosting agreement with NYDIG allows for a reimbursement fee covering power costs and management of mining facilities, contributing to the revenue generation.

Revenue Stream	2024 (Nine Months)	2023 (Nine Months)	Change (%)
Datacenter Hosting	$22.2 million	$28.7 million	-23%
Cryptocurrency Mining	$15.0 million	$17.0 million	-12%
Total Revenue	$37.2 million	$45.7 million	-18%

Power Sales to NYISO Generating Diversified Income

Greenidge also earns revenue from power sales to the New York Independent System Operator (NYISO). For the nine months ended September 30, 2024, power and capacity revenue totaled $7.1 million, a significant increase of 43% compared to $5.0 million in the previous year. This increase can be attributed to higher average power prices and increased sales volume, which contributed approximately 25% and 18% to the revenue growth, respectively.

The power revenue is derived from three streams: hourly power pricing, capacity revenue for committing to sell power, and ancillary service revenue. The breakdown for the power sales revenue is as follows:

Revenue Type	2024 (Nine Months)	2023 (Nine Months)	Change (%)
Power Revenue	$7.1 million	$5.0 million	+43%
Capacity Revenue	Included in Power Revenue	Included in Power Revenue	N/A
Ancillary Service Revenue	Included in Power Revenue	Included in Power Revenue	N/A

Engineering and Construction Management Services for Third Parties

Additionally, Greenidge provides engineering, procurement, and construction management (EPCM) consulting services. In the nine months ended September 30, 2024, the revenue from these services was $335,000, marking the first revenue recorded from this segment. This revenue stream contributes a smaller yet important aspect to the overall business model as it diversifies the company's income sources beyond cryptocurrency and power sales.

Revenue Segment	2024 (Nine Months)	2023 (Nine Months)	Change (%)
EPCM Services	$335,000	$0	N/A

Updated on 16 Nov 2024

Resources:

1. Greenidge Generation Holdings Inc. (GREE) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Greenidge Generation Holdings Inc. (GREE)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Greenidge Generation Holdings Inc. (GREE)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.