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Riot Platforms, Inc. (RIOT)·Q2 2025 Earnings Summary

Executive Summary

  • Record profitability driven by higher bitcoin prices and operational efficiency: net income $219.5M and Adjusted EBITDA $495.3M; Bitcoin Mining gross margin 50% .
  • Revenue rose to $153.0M (+118% YoY) as bitcoin mining revenue hit $140.9M; engineering revenue modest at $10.6M .
  • Guidance: hash rate target raised to 40.0 EH/s for Q4 2025, with initial Q1 2026 target of 45 EH/s; strategic focus on transitioning power to AI/HPC data centers while monetizing megawatts today .
  • Consensus comparison: EPS beat materially (Actual $0.65 vs Consensus $0.058*) and revenue slightly below (Actual $153.0M vs Consensus $157.1M*); beat driven by bitcoin price appreciation and mark-to-market items, offset by curtailment and tax assessment . Values retrieved from S&P Global.
  • Catalysts: progress on securing AI/HPC tenant (basis of design targeted by end of Q3), record engineering backlog ($118.7M), upsized $200M BTC-backed credit facility with Coinbase to fund growth .

What Went Well and What Went Wrong

  • What Went Well

    • Strong profitability: Net income $219.5M including $470.8M unrealized gain on bitcoin; Adjusted EBITDA $495.3M highlighting operational leverage in current hash price environment .
    • Efficiency and uptime: 87% operational uptime and 50% mining gross margin; Cost to mine per BTC (ex-depreciation) $48,992, broadly in line with Q1 despite higher network hash rate .
    • Strategic progress in data centers: Hired Chief Data Center Officer Jonathan Gibbs to lead the platform; expanded Corsicana land to 858 acres to maximize tenant optionality and power utilization .
    • Quote: “Riot is in the business of monetizing megawatts… progressively shift power capacity towards data centers” — CEO Jason Les .

  • What Went Wrong

    • Cost headwinds: Direct non-power costs increased due to Corsicana property tax reassessment, adding ~$2,650 per BTC in Q2 .
    • Revenue modestly below consensus; Q2 BTC production decreased vs Q1 as global network hash rate rose faster than Riot’s deployed hash rate .
    • Litigation/non-recurring cash expenses elevated: $14.3M litigation and $2.0M advisory in SG&A (though steps taken to reduce over time) .

Financial Results

Headline P&L vs Prior Periods and Estimates

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$70.0 $161.4 $153.0
Net Income ($USD Millions)$(84.4) $(296.4) $219.5
EPS (GAAP) ($USD)$(0.32) $(0.90) $0.65
Gross Margin (%)43%46% 46%
Adjusted EBITDA ($USD Millions)$(75.2) $(176.3) $495.3

Results vs S&P Global Consensus

MetricConsensusActual
Revenue ($USD Millions)157.1*153.0
EPS ($USD)0.058*0.65

Values retrieved from S&P Global.

Segment Breakdown (Q2 2025)

SegmentRevenue ($USD Millions)Gross Margin (%)
Bitcoin Mining$140.9 50%
Engineering$10.6 7%
Other$1.5 (derived: total less segments) N/A

KPIs

KPIQ2 2024Q1 2025Q2 2025
BTC Produced (#)844 1,530 1,426
Avg BTC Price ($/BTC)$66,069 $93,385 $98,800
Cost to Mine per BTC (ex-depr.) ($)$25,329 $43,808 $48,992
Power Curtailment Credits ($USD Millions)$13.9 $7.8 $8.3
Ending Hash Rate Deployed (EH/s)22.0 33.7 35.4
Operational Uptime (%)61% 88% 87%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Installed Hash Rate (EH/s)Q4 202538.4 40.0 Raised
Installed Hash Rate (EH/s)Q1 2026N/A45.0 New Target
Bitcoin Mining Cash SG&A Run-Rate ($/qtr)2025$30–33M (company run-rate guide) ~$25.4M (mining run-rate in Q2 scenario analysis) Lower run-rate implied
Data Center Basis of DesignQ3 2025N/ATarget completion by end of Q3 Milestone
Engineering Backlog ($USD Millions)H2 2025N/A$118.7 (record backlog; acceleration expected) Acceleration expected

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
AI/HPC Data Center StrategyFeasibility study at Corsicana; securing power & land; begin team build Hired CDCO; expanded Corsicana to 858 acres; basis of design targeted by end of Q3; pursuing tenant lease Advancing execution
Supply Chain/Long-Lead ItemsSubstation equipment procurement underway; fiber and water planning 600MW substation equipment arriving; water line approvals; multi-fiber paths; build-to-suit, not spec De-risking schedule
Tariffs/Macro/Power MarketMonitoring tariff impacts; hedging/curtailment strategies ERCOT 4CP participation; power credits; discussion of Texas SB6 impacts on grid programs Managing regulatory changes
Product Performance (Mining)Uptime >88%; cost to mine ~flat QoQ 87% uptime; cost to mine $48,992 (up on property taxes); gross margin 50% Efficient despite cost pressures
Regional Trends (Dallas/Austin proximity)Highlighted Tier-1 proximity benefits Location premium acknowledged; tenant demand for large-scale power near Dallas/Austin Positive tenant interest
Regulatory/LegalLitigation settlements with Rhodium; exiting hosting business Non-recurring litigation costs still present but reducing; settlement eliminated hosting disputes Improving, declining costs
Financing/TreasuryInitial $100M Coinbase facility; monthly BTC sales for ops Upsized to $200M; continued BTC sales; strong BTC treasury and cash Enhanced flexibility

Management Commentary

  • Strategic message: “Riot is in the business of monetizing megawatts… Converting as much of our power portfolio to data centers remains our preferred end use” — CEO Jason Les .
  • Execution priority: “Our number one priority is building this data center platform… complete basis of design by end of the third quarter” — CEO Jason Les .
  • Cost dynamics: “Property tax… totaled $3.8M for the quarter, adding an additional ~$2,650 per Bitcoin in direct non-power costs” — CFO Colin Yee .
  • Mining profitability: “Bitcoin mining gross margin for the quarter was 50%, an increase from 48% in the prior quarter… strong leverage to changes in hash price” — CFO/Strategy .

Q&A Highlights

  • Capital strategy: Use BTC sales and BTC-backed facility to fund ops and growth while minimizing ATM dilution; flexible approach based on BTC prices and leverage comfort .
  • Data center leasing economics: Market demand robust; rental rates reflect tenant credit and term; large-scale power garners premium interest due to expansion optionality .
  • Basis of design & schedule: Targeting completion by end of Q3; long-lead equipment already procured (substation), reducing schedule risk; build-to-suit, not spec .
  • Power strategy & regulation: Participation in ERCOT programs; monitoring Texas SB6 (e.g., 4CP changes) with policy and power teams; existing FEAs in place .
  • Hash rate outlook: Raised 2025 target to 40 EH/s; initial 45 EH/s target for Q1 2026; not fixated on specific network share but focus on value-maximizing growth .

Estimates Context

  • Q2 2025: EPS beat and revenue near-consensus. EPS Actual $0.65 vs Consensus $0.058*; Revenue Actual $153.0M vs Consensus $157.1M*. Values retrieved from S&P Global.
  • Drivers of variance: Higher bitcoin price at quarter-end created large mark-to-market gains (unrealized gain on BTC ~$470.8M); mining margins improved on hash price; partially offset by Corsicana property tax and global network hash rate increases .
  • Implications: EPS estimates likely to move higher given mark-to-market sensitivity to BTC price and indicated margin resilience; revenue estimates will track BTC production, hash price, and curtailment credits; non-recurring litigation/advisory poised to decline over time .

Key Takeaways for Investors

  • Riot delivered a high-quality profitability print (Adjusted EBITDA $495.3M; GAAP EPS $0.65) with operational uptime and 50% mining gross margins; leverage to hash price remains significant .
  • Strategic pivot to AI/HPC is progressing methodically: CDCO hired, basis of design targeted by Q3, expanded developable land footprint to 858 acres; expect tenant engagement milestones as infrastructure and design mature .
  • Hash rate guidance raised (40 EH/s by Q4 2025; 45 EH/s in Q1 2026), funded by strong balance sheet and $200M BTC-backed facility; measured mining growth supports near-term cash generation while the data center pipeline develops .
  • Cost vigilance: property tax reassessment is a new recurring headwind ($2,650 per BTC); management expects non-recurring litigation/advisory to decline; watch Cash SG&A run-rate trajectory .
  • BTC treasury and financing flexibility (monthly sales + Coinbase facility) reduce equity dilution risk; supports continued buildout of data center and mining upgrades .
  • Stock narrative anchor: near-term performance tied to BTC price and hash price; medium-term re-rating potential if AI/HPC leases (scale, credit quality, economics) are secured, validating “monetize megawatts” strategy .
  • Monitoring items: ERCOT/TxSB6 regulatory changes to grid programs; timing and structure of first AI/HPC tenant lease; engineering backlog conversion in H2 2025 .