Digital infrastructure company Soluna Holdings reported strong first-quarter revenue growth as expanding data center operations helped offset weaker returns from cryptocurrency mining.

Revenue rose 58% from a year earlier to $9.4 million and increased 2% from the previous quarter, according to the company’s earnings report released Monday. It was Soluna’s fourth-consecutive quarter of sequential revenue growth.

The gains were driven by additional capacity coming online at the company’s Dorothy and Kati sites in Texas. Data center hosting generated $6.7 million in revenue, while cryptocurrency mining contributed roughly $2.2 million, down from nearly $3 million the year before, as Bitcoin mining economics deteriorated. 

Despite higher revenue, Soluna remained unprofitable. A net loss widened to $17.9 million from $10.5 million a year earlier, primarily due to higher stock-based compensation, interest expense and financing costs. Adjusted EBITDA loss narrowed modestly to $2.1 million.

Soluna ended the quarter with $68.6 million in cash as it continued to expand its infrastructure footprint, including plans to grow its AI and high-performance computing business.

A snapshot of Soluna’s quarterly crypto mining revenues. Source: Soluna Holdings

Related: Paradigm reframes Bitcoin mining as grid asset, not energy drain

Crypto miners pivot toward AI infrastructure

Soluna is participating in a broader shift among Bitcoin (BTC) miners seeking new revenue streams as mining margins come under pressure. Mining economics have tightened significantly since the 2024 halving, with the recent decline in BTC prices adding further strain.

A March report from CoinShares found that as many as 20% of Bitcoin miners could be operating at a loss, particularly those using older, less efficient machines. The report also noted that Bitcoin hashprice — a key measure of miner revenue — fell to a post-halving low in February.

In response, several publicly traded miners, including HIVE Digital Technologies and TeraWulf, have redirected capital toward artificial intelligence and high-performance computing.

Analysts at Bernstein recently said IREN is expected to derive most of its future value from AI infrastructure rather than digital asset mining. The firm cited IREN’s growing AI cloud business and long-term agreement with Microsoft as key drivers of that transition.

A Bernstein analysis shows how even large-scale miners like IREN are expected to generate the bulk of their revenues from AI. Source: Bernstein

Related: Core Scientific plans $3.3B debt raise to fund AI data center push