Publicly traded mining company Hive Blockchain (HVBTF) reported a Q2 profit even as the firm continued its “big spend” on upgrading its mining facilities. 

Hive took in $13 million in quarterly mining revenue, according to its Q2 earnings report Tuesday, 8% up from the year-ago period’s $12 million.

The company posted a profit of $7.4 million, a significant increase from its $1.8 million loss in the same period last year. Gross mining margin expanded to $9.2 million, or a $0.03 profit per share, up from a $11.5 million loss, or a $0.04 loss per share.

“We’ve been able to drive down costs, which has led to the highest cash flow in any one quarter since Hive went public three years ago.,”  said Frank Holmes, interim executive chairman. Cash flow was $10.6 million, up from a loss of $4.6 a year earlier.

As one of the largest ether mining firms, Hive noted a year-over-year decrease in bitcoin mining due to ending prior cloud mining agreements, which became unprofitable. The firm has significantly increased its mining capacity, however, and has used ether mining profit margins to enable “acquisition and initial scaling” of new bitcoin mining operations. 

The ongoing coronavirus pandemic has “delayed the ability to acquire and deploy” its new bitcoin mining operations, Hollmes said on the firm’s earnings call. But the firm maintains its goal of 1,000 petahashes per second (PH/s) “in the future,” Holmes said. 

Shares of the Vancouver-based company have outperformed ether’s year-to-date returns by 880 percentage points. Hive over-the-counter traded shares have gained over 1,200% year to date and were near $1.22 at last check.

The firm’s predominant focus on ether mining represents its bullish outlook on the cryptocurrency relative to bitcoin. “We think ether is going to do a big catch-up to bitcoin on a relative basis,” Holmes told investors. 

“There’s been a big spend this quarter on upgrading all of our facilities,” Holmes said, adding that the process still has “a long way to go”. By the end of January 2021, he said he expects Hive to have fully upgraded from 4GB GPU mining chips to 8GB chips and “become an even larger player” in the ethereum mining sector. 

Beyond its mining capacity, Holmes reiterated his view that the firm serves as “a proxy for people who are reluctant to use a cryptocurrency exchange or set up their own wallet and buy cryptocurrency.” 

The dollar value of Hive’s cryptocurrency earnings grew to $10.7 million, up nearly 50% from $7.2 million during the same period last year. Chief Financial Officer Darcy Daubaras told investors that Hive “likes to maintain an inventory of coins” but the company is selling current production to fund its ongoing operational upgrades. 

“We have had to accelerate the sale of coins a little bit to fund the upgrades of GPU mining chips,” Daubaras said. “But we feel it’s important to maintain a good inventory of bitcoin and ethereum.”

Update (Dec. 1, 22:03 UTC): This article has been updated to clarify Hive’s 2019 reported financial information.