Northern Data Group demonstrated progress made in Q124 alongside a capital markets day update, as it takes further steps in becoming a diversified high-performance computing (HPC) infrastructure solutions provider. It expects to deploy 20,000 NVIDIA H100 graphic processing units in FY24, cementing its position as Europe’s foremost AI hardware cluster. Key to this, 85% of its H100 capacity has already been sold. Management’s ambitious guidance is unchanged, expecting revenue of €200–240m in FY24 and €520–570m in FY25, with adjusted EBITDA growing from €50–80m in FY24 to €300–350m in FY25. The step-up in profitability in FY25 reflects the first year of full contribution from the company’s Ardent Data Centers, coinciding with peak H100 efficiency. Having moved away from being a pure-play cryptocurrency miner, Northern Data’s revenue profile is more predictable, stable and diversified. The group is fully capitalised and, with a clear capex plan that is front-end loaded, we believe its profitability profile should continue to improve.

Northern Data Group released its FY22 results as scheduled, reflecting delays due to its transformation into a diversified high-performance computing (HPC) infrastructure solutions provider. Despite significant crypto price declines, the group achieved year-on-year revenue growth and adjusted EBITDA positivity, driven by investments in mining compute power and a small inaugural cloud computing contribution. Ethereum’s shift to proof-of-stake led to substantial impairment, driving an operating loss. That said, Northern Data was able to repurpose a share of the graphic processing units (GPUs) from Ethereum mining for cloud computing, enabling expected FY23 revenue growth of over 10x in the recently formed Taiga Cloud division. Investments in NVIDIA H100 hardware and requisite data centres, alongside unmet demand from target customers, underpin management’s expectations for at least a further 10x Taiga revenue growth in FY24. Buoyed by bitcoin’s FY23 and FY24 appreciation, Northern Data is well-positioned for strong diversified revenue and profit growth.

Northern Data Group has received regulatory approval for its acquisition of Damoon, delivering on a key milestone. As part of the transaction, Northern Data has received more than 10,000 NVIDIA H100 Server Module Tensor Core graphic processing units (GPUs) bringing its total inventory to over 18,000 H100 GPUs and cementing its position as Europe’s largest artificial intelligence (AI) hardware cluster. This expansion bolsters the generative AI capabilities of its Taiga Cloud division, which aims to democratise access to AI compute power, driving innovation among startups, researchers and medium-sized enterprises. Amidst Europe's increasingly stringent environmental and data protection regulations, Northern Data looks well placed to capture market share.