Riot Platforms, Inc. (RIOT) Q3 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals a strategic focus on data center development and hash rate growth, supported by strong financial metrics like fully funded capital expenditures. The Q&A section highlights management's confidence in securing tenants and leveraging power capacity, although some responses lacked specifics. The company's strategic land acquisitions and ability to adapt to market demand are promising. Despite the lack of precise guidance, the overall sentiment is positive due to the strategic initiatives and market positioning, suggesting a stock price increase in the short term.
Key Financial Performance
Total Revenue $180.2 million, an 18% increase quarter-over-quarter. The increase was driven by growth in Bitcoin mining and engineering revenue.
Net Income $104.5 million or $0.26 per fully diluted share, compared to $219.5 million or $0.58 per fully diluted share in the prior quarter. The decrease was due to lower non-GAAP adjusted EBITDA and other factors.
Non-GAAP Adjusted EBITDA $197.2 million, compared to $495.3 million in the prior quarter. The decline was attributed to changes in operational efficiency and other financial adjustments.
Bitcoin Production 1,406 Bitcoin, compared to 1,426 Bitcoin in the prior quarter. The slight decline was due to an 8% growth in the global hash rate, which exceeded Riot's 3% growth in hash rate deployed, partially offset by improved operating efficiency and utilization rate of 86%.
Power Credits $31 million generated, lowering the net cost of power to $0.032 per kilowatt hour. This was achieved through active employment of Riot's power strategy.
Bitcoin Holdings 19,287 Bitcoin with a market value of $2.2 billion at the end of the quarter.
Direct Cost per Bitcoin $46,324, resulting in a Bitcoin mining gross profit of $95.7 million or 59% gross profit margin.
SG&A Expenses $69.8 million, including $32.9 million in noncash stock-based compensation and $7.5 million in temporary litigation-related costs and advisory fees.
Engineering Business CapEx Savings $23 million in cumulative savings on equipment purchases since the acquisition of ESS Metron.
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Operating Highlights
Data Center Development: Initiated Core & Shell development of the first 2 buildings at Corsicana data center campus, representing 112 megawatts of IT capacity. Construction to begin in Q1 2026.
Land Acquisition: Acquired 67 acres adjacent to Corsicana site for $40 million, enabling full utilization of 1 gigawatt power capacity.
Standardized Design: Completed basis of design for Tier 3 data centers, adaptable to tenant needs, supporting faster procurement and scalability.
Power Portfolio: Riot holds 1.8 gigawatts of fully approved power, primarily in Dallas and Austin, key data center markets.
Bitcoin Mining: Continues to be profitable, generating $160.8 million in Q3 revenue, supporting transition to data center development.
Operational Efficiency: Improved utilization rate to 86% and reduced net power cost to $0.032 per kilowatt hour.
SG&A Management: SG&A remained flat while revenue grew 18% QoQ, demonstrating economies of scale.
Strategic Shift to Data Centers: Transitioning from Bitcoin mining to data center development to maximize power portfolio value.
Vertical Integration: Engineering business provides strategic advantage in manufacturing and procurement, saving $23 million in CapEx to date.
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Risk or Challenges
Regulatory and Legal Risks: The company faces potential regulatory and legal challenges, including ongoing litigation costs and the need to comply with evolving regulations in the data center and Bitcoin mining industries. These could impact operational costs and timelines.
Supply Chain Constraints: The development of data centers is heavily reliant on long-lead equipment, which is currently supply-constrained. Delays in procurement could disrupt construction timelines and tenant commitments.
Economic and Market Risks: Economic uncertainties, including fluctuations in Bitcoin prices and global hash rates, could impact the profitability of the Bitcoin mining business, which is a key revenue driver for the company.
Operational Execution Risks: The company is undergoing a significant transformation into a data center-focused business. This involves complex construction projects, tenant acquisition, and operational scaling, all of which carry execution risks.
Competitive Pressures: The data center market is highly competitive, with significant demand for talent and resources. Riot must compete with other players to attract tenants and skilled personnel, which could impact its ability to execute its strategy effectively.
Financial Risks: The company is making substantial capital investments in data center development, which could strain financial resources if revenue generation or tenant acquisition does not meet expectations.
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Guidance & Outlook
Data Center Development: Riot is initiating the Core & Shell development of the first two buildings at the Corsicana data center campus, representing 112 megawatts of critical IT data center capacity. Construction is planned to begin in Q1 2026, with the first building expected to be completed in Q1 2027. The company plans to develop a total of 1 gigawatt of utility load data center capacity at Corsicana in two phases, with Phase 1 encompassing 504 megawatts and Phase 2 representing 168 megawatts.
Future Leasing and Tenant Commitments: The pace of development in Phase 1 of the Corsicana site will be driven by tenant commitments and leasing progress. Riot is sequencing capital expenditures to maximize power-to-value conversion and will provide cost estimates and timelines for full build-to-suit data centers as leasing discussions progress.
Strategic Shift in Business Model: Riot is transitioning from Bitcoin mining to data center development as the primary focus, aiming to maximize the value of its power portfolio. Over time, the company plans to shift its megawatts from Bitcoin mining to data center use, leveraging its 1.8 gigawatts of fully approved power capacity.
Market Position and Expansion: Riot aims to capitalize on its position in high-demand data center markets, particularly in the Dallas and Austin regions, which account for 1.7 gigawatts of its power capacity. The company anticipates market revaluation as it converts power capacity into contracted data center leases.
Cost and Efficiency Improvements: Riot plans to maintain cost discipline while selectively hiring for its data center business. The company has implemented measures to reduce SG&A expenses and improve operating leverage, aiming for a leaner organization that can scale data center development efficiently.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Can you give an update on discussions with potential tenants for the first few builds at Corsicana and what is needed to finalize a lease?
A:Jason Les stated that while he couldn't comment on specific ongoing discussions, the company is encouraged by its market position. He highlighted the growing demand for power due to the AI explosion and the bottleneck in power availability. Riot is focused on high-quality tenants and has taken steps to derisk sites, ensuring credibility and readiness for service timelines. The company has completed key steps like basis of design and technical discussions, and initiated Core & Shell development at Corsicana.
Q:Is there additional power out there that Riot could procure to add to the pipeline before 2028?
A:Jason Les mentioned that Riot is actively working on building out its power pipeline beyond the 1.7 gigawatts at Corsicana and Rockdale. Jason Chung added that while they evaluate opportunities to expand the power portfolio, the primary focus remains on the current power portfolio and its development.
Q:How does constructing the 112 megawatts of Core & Shell earlier than signing a deal factor into negotiations with potential tenants?
A:Jason Les explained that the Core & Shell development is not a shift in strategy but an unveiling of their approach. The development derisks the project, demonstrates power availability, and positions Riot to meet tenant specifications. The Core & Shell Plus includes additional features like generator buildings and security systems, enabling quick conversion to Tier 3 data centers. This strategy aims to attract high-quality tenants and maximize asset value.
Q:How is Riot balancing third-party engagements for ESS Metron and internal projects like Corsicana?
A:Jason Les stated that ESS Metron primarily serves third-party data center projects, with Riot being a small portion of its business. The company balances internal demand with growing third-party demand, leveraging cost synergies and strategic benefits from controlling the supply chain.
Q:What is the sequencing and timing for Phase 1 at Corsicana, and how does it depend on customer demand?
A:Jason Les mentioned that construction of the first Core & Shell buildings will begin in Q1 2026 and complete in Q1 2027. Future phases will depend on industry demand and customer conversations. Riot is positioned to rapidly add buildings based on customer needs.
Q:How is Riot planning to develop opportunities at Rockdale alongside Corsicana?
A:Jason Les stated that while Corsicana is the near-term focus, Rockdale shares similar attractive characteristics like secured power and proximity to Austin. Riot is enhancing Rockdale's attractiveness for tenants while focusing on Corsicana. Rockdale remains an optionality for future development.
Q:What is Riot's stance on becoming a neocloud provider?
A:Jason Les stated that Riot is focused on a build-to-suit colocation model to maximize value. While the company is not closing the door on becoming a neocloud provider, the current priority is building data centers that can serve a wide range of customers, including hyperscalers, enterprises, and neoclouds.
Q:Does Riot's location and timing for service readiness allow for better pricing and tenant quality?
A:Jason Les confirmed that Riot's location and timing position it to command strong economics and attract high-quality tenants. The company is focused on building a platform to service a range of tenants and believes its assets can secure favorable deal terms and tenant quality.
Q:What is the status of Riot's hiring for the data center team?
A:Jason Les mentioned that Riot is building its team in sequence with business needs. Recent hires include a Senior VP of AI and Hyperscale Sales. The company continues to attract veteran talent and plans to add more as the business cycle progresses.
Q:Will Bitcoin mining at Corsicana continue as AI development progresses?
A:Jason Les explained that Bitcoin mining will continue on unused land at Corsicana while data center development progresses. Once the available land is exhausted, the company plans to repurpose Bitcoin mining areas for data centers, driven by customer demand and market dynamics.
Q:Does Riot have internal goals for expanding its power pipeline by 2026 or 2027?
A:Jason Les stated that while no specific goals are disclosed, expanding the power pipeline is a strategic priority. Riot aims to leverage its capability to secure power at scale and add more sites to its pipeline.
Q:What are the key next steps for Riot in the next 90 to 120 days?
A:Jason Les highlighted that the focus will be on progressing development at the two Core & Shells announced, breaking ground in Q1 2026, and advancing detailed designs. The company will also continue technical outreach with potential tenants.
Q:Are there any major capital outlays planned for 2026 beyond the $214 million for Core & Shell?
A:Jason Les mentioned that the majority of 2026 CapEx will be the $214 million for the first two Core & Shells. Riot is being capital efficient and has secured most long lead-time equipment without deposits. The Bitcoin mining business also generates cash flow to support development.
Q:What is the potential for improving the PUE at Corsicana?
A:Jason Les stated that the base case PUE is approximately 1.49, but the company aims to improve it for better project economics. The focus is on achieving and surpassing this base case.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on ongoing tenant discussions, internal goals for power pipeline expansion, and exact capital outlays for 2026 beyond the Core & Shell development. Responses were often broad, emphasizing strategy and potential without concrete data or timelines.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Core Shell
Metron EA
Number
Phase megawatt
President Investor
SGA
Shell building
Shell development
achievement
basis design
campus design
center market
construction
cycle
delivery
development building
development center
enterprise
floor
format
foundation
hall
leasing
megawatt building
megawatt center
megawatt load
mod
parcel
phase
place
portfolio power
power portfolio
process
procurement
profitability
sale
saving
scale center
site development
story
system
talent
tenant
RIOT Transcript
Riot Platforms, Inc. (RIOT) Q1 2026 Earnings Call Transcript
Positive4-30
Riot Platforms reported strong financial performance with a 15% revenue increase, 20% rise in Bitcoin production, and improved profitability metrics. The turnaround to net income and increased cash flow from operations are positive indicators. Despite the absence of operational updates and strategic initiatives discussions, the financial metrics and favorable market conditions suggest a positive stock price movement. However, forward-looking statements pose a risk, but the overall sentiment remains positive given the strong financial results.
Riot Platforms, Inc. (RIOT) Q4 2025 Earnings Call Transcript
Positive3-2
The earnings call indicates a strategic shift from Bitcoin mining to data center development, with strong financial metrics and optimistic guidance. Riot's partnership with AMD and significant engineering backlog show promise, and the Q&A reveals strong liquidity and interest in project finance markets. However, management's avoidance of specifics in some areas tempers enthusiasm. Despite this, the overall sentiment leans positive, given the strategic partnerships, cost efficiencies, and focus on high-demand markets, predicting a stock price increase of 2% to 8% over the next two weeks.
Riot Platforms, Inc. (RIOT) Q3 2025 Earnings Call Transcript
Positive10-30
The earnings call reveals a strategic focus on data center development and hash rate growth, supported by strong financial metrics like fully funded capital expenditures. The Q&A section highlights management's confidence in securing tenants and leveraging power capacity, although some responses lacked specifics. The company's strategic land acquisitions and ability to adapt to market demand are promising. Despite the lack of precise guidance, the overall sentiment is positive due to the strategic initiatives and market positioning, suggesting a stock price increase in the short term.
Riot Platforms, Inc. (RIOT) Q2 2025 Earnings Call Transcript
Positive7-31
The earnings call summary and Q&A indicate strong financial performance, strategic acquisitions, and promising data center developments, with positive guidance and stable cost management. The market strategy and shareholder return plans are well-received, despite some uncertainties in power deals and legislative impacts. The company's focus on expanding data center capacity and maintaining a strong Bitcoin mining position further supports a positive outlook. Given the market cap, the stock is likely to see a moderate positive reaction, falling into the 'Positive' category (2% to 8%).
RIOT Slides
RIOT Report
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