Riot Platforms Reports Steep Q3 Loss

Riot Platforms reported a steep third-quarter loss, driven by rising costs and unrealized investment losses, as the Bitcoin miner lowered its hash rate targets for 2024 and beyond.

Financial Highlights

For the quarter ending Sept. 30, the company reported total revenue of $84.8 million, with $67.5 million from Bitcoin mining. The Bitcoin mining gross profit, excluding depreciation, was $28.4 million, marking a 42% margin—a significant drop from the 181% margin in the same quarter last year. Rising costs in electricity, labor, and insurance contributed to the difference.

The company posted a net loss of $154.4 million, or $0.54 per share, compared to a net loss of $84.4 million ($0.32 per share) in Q2 and a $0.44 per share loss in the year-ago quarter. This also significantly missed the consensus estimates that expected a loss of $0.18 per share.

This larger loss included $38 million in unrealized losses on marketable equity securities, $30.6 million in non-cash stock-based compensation, and $60 million in depreciation and amortization expenses.

Non-GAAP adjusted EBITDA was a loss of $3.6 million for the quarter, slightly deeper than the $3.1 million loss recorded in the same period last year.

Bitcoin Production

Despite the halving event in April and increased network difficulty, Riot Platforms produced 1,104 Bitcoin during the quarter, consistent with the 1,106 BTC mined during the year-ago quarter. The company had previously experienced a 52% year-over-year decline in the previous quarter.

Future Outlook

Riot ended the quarter with a strong balance sheet, holding approximately $1.3 billion in cash, restricted cash, marketable equity securities, and 10,427 Bitcoin. CEO Jason Les expressed excitement about the company's future plans, aiming to develop and deploy increased power capacity and hash rate across Texas and Kentucky, targeting 100 EH/s in self-mining capacity.

Riot expects to reach a self-mining hash rate of 34.9 EH/s by year-end 2024, down from the previous 36.3 EH/s target due to slower-than-expected expansion at newly acquired facilities in Kentucky, now expected to be operational in 2025. Additionally, the 2025 target was lowered from 56.6 EH/s to 46.7 EH/s. Some expansion plans for Kentucky are now pushed to 2026, along with delays in substation construction at the Corsicana facility, which is expected to be fully developed by 2026 with a hash rate of 65.7 EH/s across all facilities.

Riot's stock was down approximately 4% in after-hours trading after a 3.6% drop in regular trading, with shares declining about 32% year-to-date.