The U.K.-based Mining-as-a-Service (MaaS) firm noted a 146% jump in its sales between October 1 and December 4 after selling a new batch of packages.
It led the company to beat its January 2019 sales targets ahead of time and by a notable margin. As of now, Argo expects to note an annual revenue of $6.2 million, up from $0.26 million when it listed on the London Stock Exchange.
Meanwhile, the firm stated that its net cash balance as of November 30 had reached close to $19.22 million.
Mike Edwards, co-founder, and director of Argo, claimed that their high revenue growth proved their strategies were working despite the crash in the crypto market lately. He acknowledged that the demand for crypto mining packages was already going up, which made Argo expand its mining capacity in September to cater to seven-times more subscribers. As expected, the supply underfed the growing demand, leading to an immediate sell-off of the mining software packages after release.
“Demand for the company’s packages continues to exceed supply, but the company looked to the future with confidence,” Edwards added.
Related Reading: US Mining CEO: Bitcoin Miners Are Being Flushed Out of the Market
Argo has a sustainable business model that could lead to “highly-profitable” fiscal quarters in the future, believes Alan Howard, a senior equity analyst at Argo’s house broker, Mirabaud Securities.
The financial expert explained that the firm had started posting profits just three months after the launch, with its annual revenue run rate hitting $2.5 million. He recognized that if Argo manages to sell 30,000 packages within the first 12 months of launch, its revenue run rate will peak to as highs as $18 million. It would remain profitable even after cutting down operational costs related to hardware, customer acquisition, and electricity.
“Longer term, the company is well positioned to develop a mass market and highly profitable global crypto-mining service, having already secured enough power capacity at highly attractive electricity costs (US$0.030-0.038 per kWh) to be able to service over 150,000 packages from its Canadian data centers,” Howard had said.
The company could also benefit from Bitcoin’s falling difficulty which makes it easier for miners like them to mine the digital currency while preserving the essence of its proof-of-work blockchain. However, the projections do not specifically describe how much of a role Bitcoin could play in posting bullish figures for Argo.
The crypto mining sector faced huge losses after the crypto market crashed more than 80% from its all-time high. Miners that were bullish on specific cryptocurrencies pre-ordered expensive mining equipment, expecting their tokenized rewards would be met with higher fiat equivalent down the road.
At the same time, chipmaking companies such as Nvidia and AMD misread the demand for crypto mining equipment and oversupplied the market. As the demand dropped due to non-profitability, they eventually stopped manufacturing more mining chips.
Argo, on the other hand, has removed the necessity of owing mining equipment from the equation. Their users subscribe to their monthly packages, and they use the money to run their mining operations in countries with cheaper electricity rates – thereby, ensuring profits to all. Noting that Argo is heavily regulated, investors appear more confident in their business model.
Last checked, Argo shares went up 18.4% to 5.625p.