Roth Capital Partners analyst Darren Aftahi has maintained his “Buy” rating and C$0.85 target on DMG Blockchain Solutions (DMG Blockchain Solutions Stock Quote, Chart, News, Analysts, Financials TSXV:DMGI) in a May 23 earnings note, citing growing momentum behind the company’s shift into AI and high-performance computing despite a mixed quarter and trimmed forecasts.
Vancouver-based DMG Blockchain Solutions is a Canadian data center operator and blockchain platform focused on Bitcoin mining and related services. It runs a carbon-neutral facility in Christina Lake, B.C.. It offers end-to-end software tools under its Core+ platform, including custody services, a mining pool and other crypto products for institutions. The company follows a September fiscal year.
DMGI is moving forward with its shift toward AI and high-performance computing, focusing in the near term on deploying modular 2MW prefabricated data centers to speed up rollout and lock in long-term contracts. While talks are still early, interest from government data mandates and Canadian agencies suggests what Aftahi is calling a “solid pipeline.”
The company also has financing options through Bitcoin sales, partnerships, or its Malahat project. Landing an initial anchor tenant could boost investor confidence. Meanwhile, Core+ and Systemic Trust are expected to grow in the second half of 2025, helping DMGI expand its business beyond Bitcoin.
“DMGI’s entry into AI/HPC infrastructure appears increasingly likely to begin with smaller-scale deployments (as seen with its 2MW prefabricated units) as it builds credibility and deepens government relationships for larger-scale deployments over time,” Aftahi said. “These modular builds allow for faster deployment and serve as bridge infrastructure while DMGI pursues long-term, sovereign-aligned offtake contracts in Canada. Whether via AI Cloud (fully integrated) or traditional HPC (customer-owned GPUs), revenue is likely a late CY26/CY27 story. Although customer discussions remain exploratory, we still anticipate these to be long-term, sovereign contracts.”
Aftahi said DMG’s flexible financing options, such as Bitcoin sales, project-specific funding, or support from its Malahat partnership, could help lower execution risk if an offtake deal is secured and put the company in a strong position to meet small- to mid-scale AI infrastructure demand.
“We believe that once DMGI secures a long-term anchor tenant, it could unlock new revenue streams and catalyze a re-rating beyond BTC exposure,” he said. “We also expect Core+ and Systemic Trust to see greater adoption by late CY25.”
Aftahi said DMG’s fiscal Q2 2025 results were mixed, with revenue coming in about 3% above expectations but Adjusted EBITDA about 2% lower. The company mined roughly 91 BTC, down 6.5% from the previous quarter, while its hash rate grew 8.3%, matching network growth. Power costs to mine rose to around $55,000 per BTC—up 17%—due to an 11% increase in overall power costs, which pushed gross margins down by about 4 percentage points to 44.9%. DMGI also faced three days of curtailment in March after shifting half its capacity to non-firm power. Operating expenses were 2% lower, but losses from Core+ and other revenue sources increased to $0.5-million as that part of the business continued to scale. Adjusted EBITDA came in at about $2.2-million. The company ended the quarter with roughly $61.2-million in cash, BTC, and investments, and used $0.9-million in operations.
He expects DMG’s Bitcoin hash rate to run below full capacity in the near term as the company adjusts its older equipment during the hotter months but sees efficiency improving as DMG scales up to 3 EH/s by the end of calendar 2025. However, he’s taking a slightly more cautious view, expecting it to take about a quarter longer.
Aftahi thinks that DMG will generate $1.05-million in Adjusted EBITDA on $42.89-million in revenue for fiscal 2025, down from previous estimates of $1.52-million in EBITDA and $43.38-million in revenue. For fiscal 2026, he expects those figures to improve to $1.69-million in EBITDA on $53.67-million in revenue, a significant downward revision from prior estimates of $4.00-million in EBITDA and $59.92-million in revenue.
Aftahi believes DMGI will likely roll out AI and HPC contracts in smaller phases, starting with the 2MW portable data center. However, due to uncertainty around when an offtake deal might be signed and the financial terms, he is cautious and now expects HPC-related revenue to begin in early 2027.
“These changes reduce revenue/EBITDA on a forward basis,” he said. “Were DMGI to reach an HPC/AI agreement, the portable data centers could help speed up time-to-energization, which we believe could accelerate the timeframe of generating HPC revenue in our model.”
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About The Author /
Rod Weatherbie is a journalist based in Prince Edward Island. Since 2004, he has written extensively about the Canadian property and casualty insurance landscape. He was also a founder and contributing editor for a Toronto-based arts website and a PEI-based food magazine. His fiction and poetry have been featured in The Fiddlehead, The Antigonish Review, and Juniper.
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