On July 31, 2024, Riot Platforms Inc (RIOT, Financial) released its 8-K filing for the second quarter of 2024. Riot Platforms Inc is a vertically integrated Bitcoin mining company focused on building, supporting, and operating blockchain technologies. The company's segments include Bitcoin Mining, Data Center Hosting, and Engineering. The Bitcoin Mining segment generates the maximum revenue from the Bitcoin the company earns through its mining activities.
Performance and Challenges
Riot Platforms Inc (RIOT, Financial) reported total revenue of $70.0 million for the three-month period ended June 30, 2024, falling short of the analyst estimate of $72.22 million. The company also reported a net loss of $(84.4) million, or $(0.32) per share, compared to the analyst estimate of $(0.14) per share. This performance is significant as it highlights the challenges faced by the company, including the Bitcoin network 'halving' event in April 2024, which reduced the Bitcoin block subsidy received by miners.
Financial Achievements
Despite the challenges, Riot Platforms Inc (RIOT, Financial) achieved several financial milestones. The company generated $13.9 million in power credits, including $4.4 million from participation in demand response programs, which reduced the average energy cost and brought the average direct cost to mine a Bitcoin to $25,327. Additionally, Riot energized its second large-scale facility in Corsicana, TX, adding significant capacity to its operations.
Income Statement Highlights
Key financial results for the second quarter of 2024 include:
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Total Revenue | $70.0 million | $76.7 million |
| Bitcoin Mining Revenue | $55.8 million | $49.7 million |
| Net Loss | $(84.4) million | $(27.4) million |
| Adjusted EBITDA | $(75.2) million | $24.3 million |
Balance Sheet and Cash Flow
As of June 30, 2024, Riot Platforms Inc (RIOT, Financial) reported total assets of $2.72 billion, up from $2.05 billion as of December 31, 2023. The company's cash and cash equivalents stood at $481.2 million, while total liabilities were $139.1 million. The increase in assets was primarily driven by the expansion of Bitcoin mining capacity and the acquisition of Block Mining Inc.
Operational Highlights
Riot Platforms Inc (RIOT, Financial) achieved a deployed hash rate of 22.0 EH/s as of June 30, 2024, and anticipates reaching a total self-mining hash rate capacity of 36 EH/s by the end of 2024. The company also announced the acquisition of Block Mining Inc., which added 60 MW of power capacity and potential expansion to over 300 MW by the end of 2025.
Commentary
"I am extremely pleased to present results for Riot’s second quarter 2024, during which we accomplished significant operational growth and execution of our long-term strategy," said Jason Les, CEO of Riot.
Analysis
Riot Platforms Inc (RIOT, Financial) continues to expand its operational capacity and maintain strong gross margins in its core Bitcoin mining business. However, the company faces challenges such as the Bitcoin network 'halving' and increased stock compensation expenses. The acquisition of Block Mining Inc. and the expansion of the Corsicana Facility are expected to drive future growth, but the company must manage its costs effectively to improve profitability.
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Explore the complete 8-K earnings release (here) from Riot Platforms Inc for further details.
