Riot revenue rises 65% from 2023 but says hashrate plans hampered

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As a seasoned crypto investor who has witnessed the ups and downs of this volatile market since its inception, I find Riot Platforms’ latest financial report intriguing. While it’s disappointing to see a significant net loss for the quarter, I am encouraged by their impressive revenue growth of 65% year-on-year. The fact that they were able to produce 1,104 Bitcoin this quarter despite the halving is quite remarkable.

Riot Blockchain, a major player in Bitcoin mining, reported a 65% rise in annual income compared to the previous year. However, this growth has been somewhat curtailed as they encounter difficulties with their facilities in the U.S., causing them to slow down their plans for expanding their hashrate.

In a statement made on October 30th, Riot’s CEO, Jason Les, shared that the company had generated $84.8 million in revenue during this quarter, marking a significant 65% rise compared to the same period in the year 2023.

An substantial rise in our active mining power enabled us to mine approximately 1,104 Bitcoins during this quarter,” he continued, mentioning that this output aligns with our production from Q3 of 2023, even after the halving event had occurred.

He said the firm “continued to achieve significant growth” during the first full quarter past the Bitcoin (BTC) halving, which was driven by a 159% year-over-year increase in deployed hashrate to 28 EH/s (exahashes per second) at the end of September. 

In my analysis, the quarterly net loss stood at a significant $154 million, translating to approximately $0.54 per share – a 92% increase compared to the net loss in Q3, 2023. The primary contributors to this rise were a decrease in power credits, an escalation in operational costs, and the impact of halving events.

As an analyst, I’ve found that the average cost to mine a single Bitcoin was approximately $35,376. This figure is roughly half of the current market price, which hovers around $72,000. The reason for this cost-effectiveness can be attributed to the firm’s energy efficiency, as they’ve managed to maintain an average all-in power cost of merely 3.1 cents per kilowatt-hour, a benchmark in the industry. Les further emphasized this point.

The company additionally disclosed a “strong financial foundation,” holding about $1.3 billion in cash, stocks, and around 10,427 Bitcoins, currently valued at approximately $750 million.

Hashrate projections shaved down

Les expressed a high level of enthusiasm regarding the upcoming direction for their projects, as teams are diligently working to expand both electrical power capacity and hashrate not just in Texas, but also Kentucky. The aim is to reach Riot’s next objective: increasing self-mining capacity to 100 Exahash per second (EH/s).

Instead of the projected 36.3 EH/s by the end of 2024, the hashrate is now anticipated to be 34.9 EH/s. This adjustment is due to a slower pace of expansion in their newly obtained facilities in Kentucky compared to initial plans.

Furthermore, the Bitcoin miner now expects to reach a hashrate of 46.7 million terahashes per second (EH/s) by the end of 2025, which is lower than the earlier projection of 56.6 EH/s. This adjustment is attributed to delays in expansion and longer-than-expected construction times for the next substation at its Corsicana Facility.

By the close of 2026, it is expected that the company’s operations will be in full swing, resulting in a mining hash rate capability of approximately 65.7 Exahash per second (EH/s).

On October 30th, shares of Riot Blockchain (RIOT) dropped by 3.6% in post-market trading, finishing the session at $9.86, as reported by Google Finance.

Its shares are down 32% year-to-date and have dumped 85% since their February 2021 all-time high of just over $70. 

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2024-10-31 06:13