Sign in

You're signed outSign in or to get full access.

RP

Riot Platforms, Inc. (RIOT)·Q1 2025 Earnings Summary

Executive Summary

  • Record revenue of $161.4M, a slight beat vs S&P Global consensus of $160.7M; gross margin improved to 46% from 39% in Q4, driven by higher BTC price and improved uptime; Bitcoin Mining revenue doubled YoY to $142.9M. Bold beat: Revenue beat. *
  • Bold miss: EPS of -$0.90 missed consensus (-$0.21), largely due to $271.2M mark-to-market losses on BTC holdings and marketable equity securities; D&A $77.9M and SBC $29.6M also weighed on GAAP results. *
  • Strategic catalysts: Rhodium acquisition and settlement terminated an unprofitable hosting contract (~$15M gross loss in FY24), repurposed 125 MW power to self-mining, and eliminated related litigation; progress on AI/HPC (feasibility complete, added land/fiber/water); $100M Coinbase credit facility diversified funding.
  • Guidance/tone: Management narrowed execution focus to an AI/HPC build-to-suit path, indicated an LOI would precede any lease, and raised cash SG&A run-rate guidance to $30–$33M per quarter; hash rate exit-2025 now targeted at 38.4 EH/s, below prior 46.7 EH/s.

What Went Well and What Went Wrong

What Went Well

  • Record quarterly revenue and improved operating uptime (>88%), enabling BTC production to rise to 1,530 despite a 10% increase in network hash rate. “We achieved a new record for quarterly revenue… significantly expanding our hash rate, and further enhancing our operating efficiency.”
  • Power strategy maintained one of the industry’s lowest net power costs (3.4 c/kWh) and reduced non-power direct costs per BTC; cost to mine excluding depreciation essentially flat QoQ.
  • Engineering segment returned to profitability with $13.9M revenue and 15% gross margin, aided by the E4A acquisition.

What Went Wrong

  • EPS missed due to mark-to-market losses as BTC fell from $93,354 to $82,534 at quarter-end, causing $208M of fair-value impact on BTC plus $63.2M loss on marketable equity securities.
  • Cost to mine per BTC rose YoY (ex-depr: $43,808 vs $23,034), reflecting the April 2024 halving and higher global network hash rate.
  • Guidance trajectory lower: exit-2025 installed hash rate now 38.4 EH/s vs prior 46.7; cash SG&A run-rate increased to $30–$33M/quarter (excluding one-time litigation/advisory).

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Millions)$79.3 $142.6 $161.4
Gross Margin (%)47% 39% 46%
EPS ($USD)$0.82 $0.43 -$0.90

Segment revenue and margins:

SegmentQ3 2024Q4 2024Q1 2025
Bitcoin Mining Revenue ($M)$67.5 $126.3 $142.9
Bitcoin Mining Gross Margin (%)42% 50% 48%
Engineering Revenue ($M)$12.6 $11.6 $13.9
Engineering Gross Margin (%)-7% ~-21% 15%

Key operating KPIs:

KPIQ3 2024Q4 2024Q1 2025
BTC Produced (#)1,104 1,516 1,530
Deployed Hash Rate (EH/s)28.2 31.5 33.7
Net Power Cost (c/kWh)3.1 3.8 3.4
Cost to Mine per BTC (ex-depr, $)$35,376 $42,011 $43,808

Estimate comparison (S&P Global):

MetricQ1 2025 ConsensusQ1 2025 ActualSurprise
Revenue ($USD Millions)160.7*161.4 Bold beat
EPS ($USD)-0.21*-0.90 Bold miss

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Installed Hash Rate (EH/s)FY2025 exit46.7 EH/s (Q3 2024 call) 38.4 EH/s (Q1 deck) Lowered
Capital Expenditures ($)2025/next 5 qtrs$663M over next 5 quarters (Q3 2024 call) $48.9M spent in Q1; $155.8M forecast Q2–Q4 2025 Timing/scale shifted lower
Cash SG&A run-rate ($/qtr)2025$27–$30M for Q4 2024 (Q3 call) $30–$33M per quarter (ex one-time) Raised
Engineering Revenue (GAAP, $)FY2025~$100M (incl. intercompany) $84M GAAP (ex intercompany) Clarified (GAAP)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
AI/HPC initiativesInitiated substation Phase II; early hyperscaler interest; optionality at Corsicana/Rockdale Engaged Evercore/Northland; added DC-experienced directors; feasibility study launched; 1.0 GW path Feasibility complete; added land/fiber/water; targeting build-to-suit; LOI likely precedes lease Accelerating
Supply chain/tariffsESS Metron gov’t contract constrained capacity Long-lead items for 600 MW substation; 18–24 months ASIC/power infra tariffs fluid; domestic switchgear helps; transformer costs could rise Monitoring
Financing strategy–Convertible notes; balance sheet strategy; Bitcoin yield focus Minimal ATM; monthly BTC sales; $100M Coinbase facility; leverage cap ~40% debt-to-BTC Diversifying
Operations/uptimeFocus on utilization, target >95% excl. curtailment Operational excellence; Corsicana systems performing well >88% uptime; quarter-over-quarter production growth despite 10% network hash rate increase Improving
Regulatory/legal–Active hosting litigation; elevated litigation expenses Rhodium settlement dismisses all claims; eliminates FY24 loss and litigation costs going forward De-risking

Management Commentary

  • CEO on performance: “We achieved a new record for quarterly revenue this quarter, at $161.4 million… significantly expanding our hash rate, and further enhancing our operating efficiency.”
  • CFO on EPS drivers: “Net loss… was $296.4 million or $0.90 per share… primarily driven by mark-to-market adjustments due to the quarter-end decline in Bitcoin price and marketable securities totaling $271.2 million… D&A $77.9 million… SBC $29.6 million.”
  • Strategy on AI/HPC: “We are narrowing in on a build-to-suit data center being our optimal path… an LOI would likely precede a lease.”

Q&A Highlights

  • AI/HPC demand remains robust; build-to-suit favored over powered shell to maximize value for Riot; multiple blue-chip counterparties in discussions.
  • Financing approach: minimal ATM use, monthly BTC sales, $100M Coinbase facility; maintain leverage cap ~40% debt-to-BTC.
  • LOI likely before any lease announcement; additional fiber build (~12 months) and backup generation (diesel preferred) are in progress.
  • Tariffs: ASIC and transformer tariffs fluid; domestic manufacturing mitigates some exposure; monitoring impacts on costs.

Estimates Context

  • Revenue slightly beat S&P Global consensus ($161.4M vs $160.7M); EPS missed (-$0.90 vs -$0.21), with GAAP results impacted by fair-value accounting under updated FASB guidance and BTC price decline at quarter-end. *
  • Estimate implications: Non-cash fair-value volatility may prompt analysts to emphasize non-GAAP measures (Adjusted EBITDA was -$176.3M) and segment gross margins; continued uptime gains and 125 MW repurposing could lift forward Bitcoin Mining revenue assumptions, while GAAP EPS sensitivity to BTC price remains high. *

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Operating execution improved: uptime >88%, low net power cost (3.4 c/kWh), and BTC production growth despite rising network difficulty—sustaining gross margin recovery.
  • Bold revenue beat: Record $161.4M driven by higher BTC prices and expanded hash rate; segment strength in Bitcoin Mining and an Engineering profitability rebound. *
  • Bold EPS miss: GAAP volatility from fair-value marks underscores sensitivity to quarter-end BTC prices; focus on cash costs, margins, and BTC yield for core performance.
  • Strategic optionality: Rhodium settlement adds 125 MW and eliminates legacy losses/litigation; AI/HPC campus at Corsicana advancing with feasibility complete and site enhancements underway.
  • Funding flexibility: Minimal equity dilution, diversified debt via Coinbase credit facility, and tactical BTC sales to fund growth; internal leverage guardrails in place.
  • Guidance realism: Exit-2025 hash rate now 38.4 EH/s (lower vs prior 46.7), with capex timing rebalanced; monitor subsequent updates as repurposed power and AI/HPC progress crystallize.
  • Near-term trading lens: Narrative likely driven by AI/HPC LOI/lease milestones and further operational efficiency; BTC price at quarter-end will continue to dictate GAAP EPS volatility—focus on revenue/margin trajectory and power-cost execution.