Mr. Geoff Morphy reports

BITFARMS REPORTS THIRD QUARTER 2023 RESULTS

Bitfarms Ltd. has released its financial results for the third quarter ended Sept. 30, 2023, with revenue of $35-million, net loss of $19-million, and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $7-million. All financial references are in U.S. dollars.

"During the third quarter of 2023, we increased operating capacity by 27 MW to 234 MW and by another 6 MW to 240 MW in October 2023. We executed plans to opportunistically expand farms with low-cost hydro power in Quebec and Latin America, while we continued to prudently strengthen balance sheet liquidity preparing for the next BTC Halving," said Geoff Morphy, CEO of Bitfarms. "We remain committed to investing in new facilities and miner upgrades at pricing with attractive returns. Now, with the introduction of higher efficiency, lower-priced miners, we plan to move aggressively to capitalize on more competitive pricing for equipment upgrades.

"Our geographic diversification continues to deliver competitive advantages. In Quebec, where we utilize 100 per cent renewable power, we purchased, energized, and then increased our Baie-Comeau farm to 11 MW. In LATAM, we've achieved operational success and are benefitting from exceptionally low-cost energy in the region. In Rio Cuarto, Argentina, we employed creative miner racking to extend beyond our original design of 50 MW to 54 MW. In Paso Pe, Paraguay, we acquired power purchase agreements as the foundation of a transformative expansion and began construction at our 50 MW facility. With the Paso Pe addition, we are on track to increase our Q3 2023 operating capacity by 24 per cent to 290 MW in Q1 2024. With our international development experience spanning four countries in two continents, we are well-positioned to continue our expansion and reduce production costs as we approach the Halving and capture market share consolidation opportunities that will likely arise after-Halving," Morphy concluded.

Financial Highlights for the Quarter ended September 30, 2023

• Total revenue of $35 million, compared with $35 million in Q2 2023.
• Gross mining profit and gross mining margin of $13 million and 38 per cent, respectively, compared with $14 million and 42 per cent in Q2 2023, respectively.
• General and administrative ("G&A") expenses of $8 million, including non-cash share-based compensation of $2 million, down 9 per cent from Q2 2023.
• Operating loss of $19 million, including $1 million of revaluation loss on digital assets, compared with an operating loss of $25 million in Q2 2023, which included $10 million of impairment charges.
• Net loss of $19 million, or $(0.07) per basic and diluted share, compared with $25 million, or $(0.10) per basic and diluted share, in Q2 2023.
• Non-IFRS Adjusted EBITDA of $7 million, or 20 per cent of revenue, compared with $8 million, or 22 per cent of revenue, in Q2 2023.
• Earned 1,172 BTC at an average direct cost per BTC of $16,900, compared with $15,700 in Q2 2023.
• Total cash cost, including G&A expenses, per BTC were $22,700 in Q3 2023, up from $21,800 in Q2 2023.

Liquidity

The Company held $47 million in cash and 703 BTC valued at approximately $19 million based upon a BTC price of approximately $27,000 as of September 30, 2023. "In October, we initiated our Synthetic HODL(TM) strategy to increase our upside exposure to the price of BTC with the purchase of 35 long-dated BTC call options," commented Jeff Lucas, CFO of Bitfarms. "This augments our October month-end BTC holdings in treasury, which increased by 57 BTC to 760 BTC valued at $26 million at October 31, 2023, based on a BTC price of $34,200."

Q3 2023 Financing Activities

• Sold 1,018 BTC at an average price of $27,900 per BTC for total proceeds of $28 million, a portion of which was used to repay equipment-related indebtedness.
• Paid down $6 million in equipment-related indebtedness, reducing the total outstanding balance to $10 million as of September 30, 2023.
• Fully utilized remaining Miner manufacturer credits of $19 million with the purchase of hydro containers and Miners.
• Raised $31 million in net proceeds through the Company's at-the-market equity offering program, which expired on September 12, 2023.

Financing Activities Subsequent to Q3 2023

• Sold 341 BTC of the 398 BTC earned during October 2023, generating proceeds of $10 million.
• Added 57 BTC to treasury in October 2023, increasing BTC in custody to 760 BTC, representing a total value of $26 million based on a BTC price of $34,200, on October 31, 2023.

Q3 2023 and Recent Operating Highlights

• Operations
  • Reached 6.1 EH/s corporate hashrate as of September 30, 2023.
  • Averaged 12.7 BTC per day in daily production for Q3 2023.
  • Earned 398 BTC in October 2023.
  • Powered additional 6 MW at Baie-Comeau in October 2023, fully energizing its initial 11 MW phase.
• Miners
  • Fully utilized remaining Miner manufacturer credits of $19 million for the purchase of nine MicroBT hydro containers, with a total capacity of 20 MW, and approximately 2,000 MicroBT M53S+ hydro Miners to be deployed in Paraguay and Quebec.
  • Imported and installed approximately 1,300 new M50 Whatsminer Miners, 700 new S19j Pro Antminer Miners and 5,500 new S19j Pro+ Antminer Miners, which increased capacity to 51 MW and added approximately 0.8 EH/s to the Rio Cuarto facility, bringing its total hashrate to approximately 1.5 EH/s.
  • Imported and installed approximately 2,900 new Antminer S19j Pro+ Miners in Magog, Quebec, which added a net 110 PH/s after replacing the older generation Miners, and bringing its total hashrate to approximately 330 PH/s.
  • Installed approximately 2,500 Miners in Baie-Comeau, Quebec that were redeployed from Magog, Quebec.
• Expansion Strategy
  • Purchased Baie-Comeau facility and initiated production.
  • Acquired two power purchase agreements for up to 150 MW of hydro power capacity in Paraguay and initiated deployment plan in August for a new 50 MW facility at Paso Pe. The Paso Pe location is comprised of 20 MW of next generation hydro miners and related containers, which are ordered and planned to energize and contribute 700 PH in Q1 2024, and a 30 MW air-cooled warehouse slated for next generation miners.

Conference Call

Management will host a conference call and live webcast with an accompanying presentation today, Tuesday, November 7, 2023, at 11 a.m. ET to review the Company's financial results and quarterly activity. Following management's formal remarks there will be a live question-and-answer session, which may include pre-submitted questions.

Participants are asked to preregister for the call on-line.

Q3 2023 Conference Call

Please note that registered participants will receive their dial in number upon registration and will dial directly into the call without delay. Those without internet access or who are unable to preregister may dial in by calling: 1-866-777-2509 (domestic), 1-412-317-5413 (international). All callers should dial in approximately 10 minutes prior to the scheduled start time and ask to be joined into the Bitfarms call.

The conference call will also be available through a live webcast found here:

Live Webcast

A webcast replay of the call will be available approximately one hour after the end of the call and will be available for one year, at the above webcast link. A telephonic replay of the call will be available through November 14, 2023 and may be accessed by calling 1-877-344-7529 (domestic) or 1-412-317-0088 (international) or Canada (toll free) 855-669-9658 and using access code 2148933. A presentation of the Q3 2023 results will be accessible on Tuesday, November 7, 2023, under the "Investors" section of Bitfarms' website.

Gross mining profit, gross mining margin, Adjusted EBITDA, Adjusted EBITDA margin, direct cost per BTC and total cash cost per BTC are non-IFRS financial measures or ratios and should be read in conjunction with and should not be viewed as alternatives to or replacements of measures of operating results and liquidity presented in accordance with IFRS. Readers are referred to the reconciliations of non-IFRS measures included in the Company's MD&A and at the end of this press release.

About Bitfarms Ltd.

Founded in 2017, Bitfarms is a global, publicly traded (NASDAQ/TSX: BITF) Bitcoin mining company that contributes its computational power to one or more mining pools from which it receives payment in Bitcoin. Bitfarms develops, owns, and operates vertically integrated mining farms with in-house management and company-owned electrical engineering, installation service, and multiple onsite technical repair centers. The Company's proprietary data analytics system delivers best-in-class operational performance and uptime.

Bitfarms currently has 11 farms, which are located in four countries: Canada, the United States, Paraguay, and Argentina. Powered by predominantly environmentally friendly hydro-electric and long-term power contracts, Bitfarms is committed to using sustainable, locally based, and often underutilized energy infrastructure.

We seek Safe Harbor.