Release Date: July 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Riot Platforms Inc (RIOT, Financial) achieved a 77% increase in total deployed hash rate quarter over quarter, exceeding their target.
- The company raised its 2024 deployed hash rate target from 31 EH/s to 36.5 EH/s and its 2025 target from 40 EH/s to 56 EH/s.
- Riot Platforms Inc (RIOT) generated $13.9 million in power credits during the quarter, resulting in an all-in cost of power of $0.027 per kilowatt hour.
- The acquisition of Block Mining adds 16 MW of operating capacity with potential expansion to 110 MW this year and a pipeline to over 300 MW in Kentucky.
- Riot Platforms Inc (RIOT) ended the second quarter with 9,334 Bitcoin, a 28% increase compared to the same period in 2023.
Negative Points
- Bitcoin production decreased by 52% from the second quarter of 2023, primarily due to the block subsidy halving event and increased network difficulty.
- Total revenue for the second quarter was $70 million, a 9% decrease year over year, driven by lower revenue at the company's engineering division.
- Non-GAAP adjusted EBITDA for the quarter was a loss of $75.2 million, compared to a positive $24.3 million in the second quarter of 2023.
- Net loss for the quarter was $84.4 million, or $0.32 per share, compared to a net loss of $27.4 million, or $0.16 per share, for the same period in 2023.
- The company's Bitcoin mining margin decreased to 37% from 52% in the second quarter of 2023, primarily due to the halving event and increased global hash rate.
Q & A Highlights
Q: Congrats on getting Corsicana operational. What's next for Corsicana in terms of expansion? Are there any additional approvals or permits needed?
A: (Jason Les, CEO) We are excited about scaling up Corsicana. The one gigawatt interconnect is already fully approved. The next steps involve procuring transformers and equipment to expand the substation and build additional infrastructure. We are currently identifying the best products for the second phase and will share updates on timelines and costs soon.
Q: How do you plan to scale ESS Metron given the increasing demand for its services?
A: (Jason Les, CEO) We are focused on alleviating supply chain constraints and completing major legacy jobs. We are also securing additional floor capacity to handle more production. While I can't provide specific guidance, we are committed to scaling ESS Metron to capture opportunities in the data center and AI space.
Q: How are you planning to achieve your goal of 75 exahash and beyond? Are you seeing challenges in procuring large power assets?
A: (Jason Les, CEO) Our strategy involves both organic growth and acquisitions. We prioritize securing power capacity and have been successful in Texas and Kentucky. We are also selective in M&A opportunities, ensuring they are accretive and add capacity. Our focus remains on securing power and necessary equipment.
Q: What are your views on the political landscape and its impact on Bitcoin and crypto?
A: (Jason Les, CEO) We have invested in public policy efforts to protect our business and the industry. We work with both parties to educate and advance the industry. The increasing political support for Bitcoin is a success of our strategy, and we aim to make Bitcoin a nonpartisan issue.
Q: How do you view the competition from AI and HPC for power capacity?
A: (Jason Les, CEO) Our focus is on being the best Bitcoin miner. While AI and HPC are competing for power, Bitcoin mining offers flexibility that is beneficial for the grid. We believe Bitcoin mining will help drive more generation and we have an advantage in rural areas where AI data centers may not operate as efficiently.
Q: What are the next steps regarding your investment in Bitfarms?
A: (Jason Les, CEO) We have no outstanding proposals for Bitfarms. We have concerns about their corporate governance and have requisitioned a special meeting to nominate new directors. We believe new governance will bring much-needed changes.
Q: Can you provide an update on your power strategy and expected curtailment during the summer months?
A: (Jason Les, CEO) In Q2 2024, our cost of power was $27 per megawatt hour. Texas has had a mild summer so far, which has helped keep costs low. August is typically challenging, but we are optimistic about maintaining good power costs.
Q: How do you benchmark your operations for uptime and efficiency?
A: (Jason Les, CEO) We have not been pleased with our historical uptime and are focused on improving it. We are optimistic about the results from our new infrastructure at Corsicana and ongoing initiatives at Rockdale. We expect to see significantly improved results as we scale up.
Q: What are the operational challenges with the Kentucky acquisition?
A: (Jason Chung, EVP, Head of Corporate Development and Strategy) The focus is on building out existing opportunities and securing new PPAs. The block mining team brings local relationships and expertise, while Riot provides the capital and capabilities for expansion.
Q: How do you plan to integrate the block mining team into Riot?
A: (Jason Les, CEO) The block mining team will operate as our Kentucky division. They bring strong operational expertise and local relationships. Our teams will share knowledge to improve overall operations.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
