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01/11 04:07
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Reported EPS $-0.90 EPS, down from $0.43 EPS in the prior quarter, primarily due to mark-to-market adjustments from a decline in Bitcoin price.
Total Revenue $161.4 million, a 13% increase from $142.6 million in the prior quarter, driven by increased uptime and improved operating efficiency in Bitcoin Mining.
Gross Profit $73.6 million, up from $55.7 million in the prior quarter, resulting in a gross margin increase to 46% from 39%.
Non-GAAP Adjusted EBITDA Negative $176.3 million, down from positive $296.3 million in the prior quarter, reflecting significant losses primarily due to Bitcoin price adjustments.
Net Loss $296.4 million, or $0.90 per share, compared to a net income of $136.4 million, or $0.43 per share in the prior quarter, mainly due to mark-to-market adjustments and depreciation.
Bitcoin Production 1,530 Bitcoin produced, slightly up from 1,516 Bitcoin in the prior quarter, attributed to improvements in operating efficiency.
Bitcoin Holdings 19,223 Bitcoin, an 8% increase from 17,722 Bitcoin at the end of 2024.
Bitcoin Mining Revenue $142.9 million, a 13% increase from $126.3 million in the prior quarter, driven by 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, which is 81% of total direct costs.
Cash SG&A Expenses $41.9 million, including one-time litigation expenses of $8.6 million, down to $30.6 million when excluding these one-time costs.
Engineering Revenue $13.9 million, a 20% increase from $11.6 million in the prior quarter, supported by the acquisition of E4A Solutions.
Capital Expenditures $48.9 million, primarily for the expansion of the Corsicana facility and growth of Bitcoin Mining hash rate.
Acquisition of Rhodium Assets: Riot has acquired certain assets of Rhodium, including all of Rhodium’s mining operations and access to 125 megawatts of contracted power at the Rockdale Facility.
AI/HPC Data Center Development: Riot is advancing its AI/HPC data center business, with significant progress on building its data center business and expanding its site footprint with additional land acquisitions.
Mining Uptime: Achieved an average uptime of nearly 90% in Bitcoin Mining operations, representing a significant improvement.
Hash Rate Increase: Increased self-mining hash rate from 31.5 exahash to 33.7 exahash, a 7% increase.
Bitcoin Production: Produced 1,530 Bitcoin in Q1 2025, an increase from 1,516 Bitcoin in the prior quarter.
Cost Efficiency: Direct non-power costs per Bitcoin decreased from 21% to 19% of total costs.
Exit from Hosting Business: Riot has exited the hosting business and now has full control over the onsite infrastructure and power capacity previously dedicated to Rhodium.
Financial Management: Limited use of ATM program in 2025, accessing other financing sources to fund growth and operating expenses.
Earnings Miss: Riot Blockchain reported a net loss of $296.4 million for Q1 2025, significantly missing earnings expectations of $-0.25 EPS, with actual EPS at $-0.90.
Market Volatility: The net loss was primarily driven by mark-to-market adjustments due to a decline in Bitcoin price, which fell from $93,354 at the end of Q4 2024 to $82,534 at the end of Q1 2025, resulting in a $208 million downward adjustment.
Litigation Costs: Riot incurred one-time litigation expenses of $8.6 million in Q1 2025, which contributed to the overall financial losses.
Power Costs: Direct power costs accounted for 81% of total direct costs per Bitcoin mined, indicating a significant dependency on power pricing and availability.
Supply Chain Challenges: The company is actively working on securing additional fiber capacity and water supply for its Corsicana facility, highlighting potential supply chain challenges in developing its data center business.
Regulatory Issues: The company mentioned ongoing engagement with potential counterparties and the need for compliance with regulatory requirements, which could pose challenges in the development of its AI/HPC data center.
Competitive Pressures: Riot's ability to maintain one of the lowest costs to mine Bitcoin among peers is crucial for competitiveness, especially as the network difficulty increases.
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 made in building the data center and acquiring additional land for development.
Power Strategy: Riot's power strategy has resulted in a decrease in direct power costs per Bitcoin mined, demonstrating improved operational efficiency.
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.
Hash Rate Growth Forecast: Riot's hash rate growth forecast for 2025 remains unchanged, but potential upside is expected from the recent acquisition of Rhodium's assets.
Capital Expenditures: Riot incurred $48.9 million in capital expenditures in Q1 2025, primarily for the expansion of the Corsicana substation and Bitcoin Mining hash rate growth.
Share Repurchase Program: Riot has not announced any share repurchase program during the call.
Dividend Program: Riot has not discussed any dividend program during the call.
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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