CleanSpark, Inc. (CLSK) saw its stock price plummet by 5.04% in Friday's pre-market trading, despite reporting better-than-expected third-quarter earnings. The significant drop comes as investors weigh the company's impressive financial performance against potential risks and concerns about its future outlook.

The bitcoin mining company reported a remarkable turnaround in its fiscal Q3 2025 results. Earnings per share surged to $0.78 on a diluted basis, far exceeding the analyst estimate of $0.30. Revenue nearly doubled year-over-year, increasing 90.8% to $198.6 million. However, this figure slightly missed the consensus estimate of $198.86 million. The company's net income (GAAP) turned sharply positive at $257.4 million, reversing a significant loss from the previous year.

Despite these strong results, investors appear to be focusing on several risk factors. CleanSpark's cash reserves have decreased from $121.2 million to $34.6 million, with more value now held in bitcoin. This shift exposes the company to greater cryptocurrency market volatility. Additionally, the company's long-term debt has risen to $643.9 million, which may be causing concern among some investors. The stock's decline may also be partly attributed to profit-taking, as CleanSpark shares had gained 19.4% year-to-date before this earnings report. As the company continues to navigate the volatile cryptocurrency mining landscape, investors will likely keep a close eye on its ability to manage risks and maintain profitability in the face of potential regulatory changes and energy cost pressures.