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01/11 04:08
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary reflects a mixed sentiment. Financial performance shows strong revenue growth and improved margins, but the significant net loss due to mark-to-market adjustments negatively impacts sentiment. Product development and market strategy are promising with AI/HPC opportunities and a strong demand outlook. However, the Q&A reveals uncertainties about capital projects and financing, adding risk. The market cap suggests moderate price sensitivity. Overall, the sentiment is neutral, balancing positive revenue and strategic developments against financial losses and uncertainties.
Self-Mining Hash Rate 33.7 exahash (7% increase from 31.5 exahash), due to improvements in operating efficiency.
Bitcoin Production 1,530 Bitcoin (increase from 1,516 Bitcoin in the prior quarter), attributed to enhanced operating efficiency.
Bitcoin Holdings 19,223 Bitcoin (8% increase from 17,722 Bitcoin at the end of 2024), reflecting improved mining operations.
Total Revenue $161.4 million (13% increase from $142.6 million in the previous quarter), driven by increased uptime and improved operating efficiency.
Gross Profit $73.6 million (increase from $55.7 million in the prior quarter), resulting in a gross margin of 46% (up from 39%).
Non-GAAP Adjusted EBITDA Negative $176.3 million (compared to positive $296.3 million in the prior quarter), primarily due to mark-to-market adjustments.
Net Loss $296.4 million, or $0.90 per share (compared to net income of $136.4 million, or $0.43 per share in the prior quarter), driven by mark-to-market adjustments totaling $271.2 million.
Cash SG&A Expenses $41.9 million (including one-time litigation expenses of $8.6 million and advisory fees of $3.0 million), excluding one-time expenses, equaled $30.6 million.
Bitcoin Mining Revenue $142.9 million (13% increase from $126.3 million in the prior quarter), due to increased Bitcoin production.
Bitcoin Mining Gross Margin 48% (nearly flat compared to 50% in the prior quarter).
Direct Cost to Mine $43,808 per Bitcoin, with power costs at $35,313 per Bitcoin (81% of total direct cost).
Engineering Revenue $13.9 million (20% increase from $11.6 million in the prior quarter), supported by the acquisition of E4A Solutions.
Engineering Gross Profit $2.1 million (compared to a gross loss of $2.4 million in the prior quarter), reflecting improved profitability.
Capital Expenditures $48.9 million, primarily for the 600 megawatt substation expansion at Corsicana and Bitcoin Mining hash rate growth.
Bitcoin Mining Operations: Achieved an average uptime of nearly 90% in Bitcoin Mining operations, representing a significant improvement on prior periods.
AI/HPC Data Center Development: Significant progress made on building the AI/HPC data center business, including land acquisitions and feasibility studies.
Acquisition of Rhodium Assets: Acquired Rhodium's mining operations and access to 125 megawatts of power at the Rockdale Facility for $185 million.
Bitcoin Production: Produced 1,530 Bitcoin in Q1 2025, an increase from 1,516 Bitcoin in the prior quarter.
Operational Efficiency: Substantial improvements in operating efficiency led to increased Bitcoin production despite a growing global hash rate.
Cost Management: Direct cost to mine was $43,808 per Bitcoin, with power costs accounting for 81% of total direct costs.
Exit from Hosting Business: Exited the hosting business with the acquisition of Rhodium's assets, allowing full control over infrastructure and power capacity.
Focus on Data Center Business: Primary focus for 2025 is on developing the AI/HPC data center business, leveraging existing power and land resources.
Competitive Pressures: Riot's ability to maintain a low cost to mine Bitcoin is a key differentiator in the industry, especially as network difficulty increases by 10%. This competitive pressure necessitates continuous improvements in operational efficiency.
Regulatory Issues: The company mentioned potential risks associated with regulatory changes that could impact their operations, particularly in the context of their Bitcoin mining and data center business.
Supply Chain Challenges: Riot is actively working to secure additional fiber capacity and municipal water sources for their Corsicana facility, indicating potential supply chain challenges in meeting infrastructure needs.
Economic Factors: The decline in Bitcoin price at the end of Q1 2025 led to significant mark-to-market adjustments, resulting in a net loss of $296.4 million. This highlights the economic risks associated with volatility in cryptocurrency markets.
Litigation Costs: Riot incurred one-time litigation expenses of $8.6 million in Q1 2025, reflecting ongoing legal challenges that could impact financial performance.
Operational Risks: Despite achieving nearly 90% uptime in Bitcoin mining operations, any future operational disruptions could adversely affect production and profitability.
Acquisition of Rhodium Assets: Riot has acquired certain assets of Rhodium, including all mining operations and access to 125 megawatts of contracted power at the Rockdale Facility, which is expected to enhance hash rate capacity and reduce operating losses.
AI/HPC Data Center Development: Riot is advancing its AI/HPC data center business, with significant progress on land acquisitions and infrastructure development at the Corsicana facility, aiming to meet hyperscaler demand.
Capital Expenditures: Riot incurred $48.9 million in capital expenditures in Q1 2025, primarily for the 600 megawatt substation expansion at Corsicana and to grow Bitcoin Mining hash rate.
Hash Rate Growth Forecast: Riot's hash rate growth forecast for 2025 remains unchanged, but the acquisition of Rhodium's assets may provide potential upside.
Revenue Guidance: Riot expects to meet GAAP guidance of $84 million in Engineering revenue for fiscal year 2025, with continued revenue growth anticipated in upcoming quarters.
Bitcoin Yield: Riot aims to maintain an accretive Bitcoin yield, with a current yield of 7% year-to-date.
Cost Management: Riot's cash SG&A expenses are expected to remain in line with prior guidance of $30 million to $33 million per quarter for 2025.
Data Center Business Objectives: Riot is focused on achieving key milestones for its data center business, with plans to secure attractive leases with high-quality tenants.
Share Repurchase Program: Riot has had limited use of its ATM program in 2025 year-to-date, limiting dilution to shareholders.
The earnings call reveals a strategic focus on data center development and hash rate growth, supported by strong financial metrics like fully funded capital expenditures. The Q&A section highlights management's confidence in securing tenants and leveraging power capacity, although some responses lacked specifics. The company's strategic land acquisitions and ability to adapt to market demand are promising. Despite the lack of precise guidance, the overall sentiment is positive due to the strategic initiatives and market positioning, suggesting a stock price increase in the short term.
The earnings call summary and Q&A indicate strong financial performance, strategic acquisitions, and promising data center developments, with positive guidance and stable cost management. The market strategy and shareholder return plans are well-received, despite some uncertainties in power deals and legislative impacts. The company's focus on expanding data center capacity and maintaining a strong Bitcoin mining position further supports a positive outlook. Given the market cap, the stock is likely to see a moderate positive reaction, falling into the 'Positive' category (2% to 8%).
While Riot reported a significant net loss and a negative EBITDA, the revenue and gross profit showed improvement, driven by increased Bitcoin production. The Q&A revealed robust demand for AI/HPC opportunities and positive feedback on the Corsicana site, but management's vague responses on key issues like backup generation and project financing raised concerns. The strategic focus on AI/HPC and vertical integration could be positive long-term, but short-term sentiment remains cautious due to financial losses and management's lack of clarity.
The earnings call summary reflects a mixed sentiment. Financial performance shows strong revenue growth and improved margins, but the significant net loss due to mark-to-market adjustments negatively impacts sentiment. Product development and market strategy are promising with AI/HPC opportunities and a strong demand outlook. However, the Q&A reveals uncertainties about capital projects and financing, adding risk. The market cap suggests moderate price sensitivity. Overall, the sentiment is neutral, balancing positive revenue and strategic developments against financial losses and uncertainties.
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