Riot Platforms, Inc. ((RIOT)) has held its Q4 earnings call. Read on for the main highlights of the call.
Riot Platforms’ recent earnings call painted a picture of robust growth and strategic expansion, despite facing some operational challenges. The company showcased impressive advancements in its hash rate and Bitcoin holdings, alongside a significant surge in revenue and profits. While there were some hurdles, such as decreased Bitcoin production and rising mining costs, the overall sentiment remained optimistic, with the positive developments taking center stage.
Exponential Hash Rate Growth
Riot Platforms reported a remarkable 154% increase in its self-mining hash rate, reaching 31.5 exahash by the end of 2024. This growth significantly outpaced the global hash rate increase of 67%, underscoring Riot’s competitive edge in the Bitcoin mining industry.
Record Bitcoin Holdings
The company ended 2024 with an impressive 17,722 Bitcoin, marking a 141% increase from the previous year. With Bitcoin valued at $93,354, this translates to a substantial $1.7 billion in holdings, highlighting Riot’s successful accumulation strategy.
Revenue and Profit Surge
Riot Platforms achieved a total revenue of $376.7 million in 2024, reflecting a 34% year-over-year increase. The company’s gross profit also saw a significant rise, reaching $147.6 million, up from $97.6 million in 2023, showcasing strong financial performance.
Successful Convertible Notes Offering
In a strategic financial move, Riot issued convertible senior notes, effectively lowering its cost of capital and expanding its institutional investor base. The proceeds were used to acquire more Bitcoin and enhance Bitcoin yield, strengthening the company’s financial position.
AI/HPC Opportunities
Riot is exploring new avenues in AI and high-performance computing (HPC) to maximize asset value. The company is strategically positioning itself to capitalize on the growing demand for large-scale power access by hyperscalers, potentially opening up a promising new revenue stream.
Decreased Bitcoin Production
Despite the positive developments, Riot faced a 27% decrease in Bitcoin production, producing 4,828 Bitcoin in 2024. This decline was primarily attributed to the 2024 halving event, a known challenge in the Bitcoin mining sector.
Increased Operating Costs
Riot experienced an increase in power costs, rising from $0.031 to $0.038 per kilowatt-hour. This increase impacted the cost to mine Bitcoin, affecting profit margins and highlighting the challenges of operational cost management.
Engineering Business Revenue Decline
The company’s engineering business saw a decline in revenue, generating $38.5 million in 2024, down from $64.3 million in 2023. This decrease was due to delays in a large government contract, impacting the overall revenue stream.
Forward-Looking Guidance
Looking ahead, Riot Platforms emphasized its strategic focus on expanding its Bitcoin mining operations and exploring AI/HPC opportunities. The company aims to grow its Bitcoin mining hash rate by approximately 22% in 2025, building on its current momentum. Riot’s strategy includes enhancing its Bitcoin yield and leveraging power assets to capitalize on emerging market demands.
In conclusion, Riot Platforms’ earnings call highlighted a period of significant growth and strategic expansion, with a strong focus on increasing hash rate and Bitcoin holdings. Despite facing challenges such as decreased production and rising costs, the company’s forward-looking strategies and exploration of new opportunities in AI/HPC indicate a promising future. Investors and market watchers will be keen to see how Riot navigates these dynamics in the coming year.