Riot Platforms, Inc. (RIOT) Q2 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
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%).
Key Financial Performance
Self-mining hash rate Increased from 33.7 EH/s to 35.4 EH/s, representing a 5% increase over the quarter. This was achieved while the global hash rate rose by 9%.
Bitcoin production Produced 1,426 Bitcoin in Q2 2025, a slight decrease from 1,530 Bitcoin in the prior quarter. The decrease was due to the global network hash rate growing faster than Riot's deployed hash rate.
Total revenue $153 million in Q2 2025, a 5% decrease from $161.4 million in the previous quarter. The decline was primarily driven by lower Bitcoin production due to the global hash rate increase.
Gross profit $70.3 million in Q2 2025, compared to $73.6 million in the prior quarter. Gross margin remained flat at 46%.
Net income $219.5 million or $0.65 per share in Q2 2025, compared to a net loss of $296.4 million or $0.90 per share in the prior quarter. This was primarily driven by mark-to-market adjustments due to Bitcoin price appreciation and marketable securities.
Non-GAAP adjusted EBITDA $495.3 million in Q2 2025, compared to a loss of $176.3 million in the prior quarter. This included $470.8 million in unrealized gain on Bitcoin held.
Bitcoin mining revenue $140.9 million in Q2 2025, slightly down from $142.9 million in the prior quarter. The gross margin for Bitcoin mining increased to 50% from 48%, driven by higher Bitcoin prices.
Direct cost to mine Bitcoin $48,992 per Bitcoin in Q2 2025, with power costs accounting for $37,767 (77%) and non-power costs at $11,225 (23%). Non-power costs increased due to property tax assessments.
Engineering business revenue $10.6 million in Q2 2025, a 14% decrease from $13.9 million in the prior quarter. The decrease was attributed to lower intercompany purchases.
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Operating Highlights
Data Center Development: Riot Platforms is focusing on building high-performance compute data centers as a new capability. This includes hiring Jonathan Gibbs as Chief Data Center Officer and acquiring additional land to expand their Corsicana site to 858 acres.
Bitcoin Mining: Riot increased its self-mining hash rate to 35.4 EH/s, produced 1,426 Bitcoin in Q2, and reported Bitcoin mining revenue of $140.9 million. They are also upgrading their Rockdale facility for enhanced Bitcoin mining.
Power Portfolio Utilization: Riot is strategically utilizing its power portfolio for both Bitcoin mining and data center development, aiming to maximize the value of its megawatts.
Market Positioning: Riot is leveraging its significant scale of readily available power in high-demand jurisdictions like Dallas and Austin to capitalize on growing demand for data centers.
Operational Efficiency: Riot achieved a year-over-year hash rate utilization increase from 61% to 87%, positioning itself among the most efficient operators in the industry.
Cost Management: Direct cost to mine Bitcoin was $48,992, with power costs accounting for 77%. Riot is focusing on reducing costs and improving operational efficiency.
Strategic Shift to Data Centers: Riot is transitioning from Bitcoin mining to data centers as a long-term strategy, driven by higher valuation multiples and attractive economics of data center leases.
Expansion of Power Assets: Riot is expanding its power assets and strategically shifting capacity towards data centers while maintaining Bitcoin mining operations where advantageous.
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Risk or Challenges
Transition from Bitcoin Mining to Data Centers: The pace of transition from Bitcoin mining to data centers is influenced by customer demand trends, availability of financing, and the general data center market. This creates uncertainty in execution and potential delays in achieving strategic goals.
Global Bitcoin Network Hash Rate Growth: The global hash rate is growing faster than Riot's self-mining hash rate, leading to reduced Bitcoin production and revenue. This could impact the company's financial performance if the trend continues.
Direct Costs of Bitcoin Mining: Direct costs to mine Bitcoin, including power and non-power costs, have increased. Property tax assessments and other non-power costs have risen, potentially reducing profitability.
Litigation Expenses: Litigation expenses remain high, with $14.3 million incurred in the second quarter. While efforts are being made to reduce these costs, they remain a financial burden.
Data Center Development Challenges: The footprint of the Corsicana site may complicate the full utilization of its power availability for data center use, potentially increasing development costs and delaying timelines.
Power Market Constraints: Lead times to procure power in key markets like Dallas and Austin are significant, ranging from 36 to 42 months. This could delay the company's ability to capitalize on its data center strategy.
Dependence on Bitcoin Price: The company's financial performance is highly sensitive to Bitcoin price fluctuations, which directly impact revenue and profitability.
Capital Expenditure Requirements: Significant capital expenditures are required for data center development and Bitcoin mining upgrades. While these are funded through 2025, they represent a financial risk if market conditions change.
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Guidance & Outlook
Data Center Development: Riot is aggressively pursuing the development of its data center business, with plans to transition power capacity from Bitcoin mining to data centers based on customer demand, financing availability, and market conditions. The company aims to utilize its 600 megawatts of power at Corsicana for high-performance computing data centers, with 400 megawatts expected online in Q1 2026 and the remaining 200 megawatts in the second half of 2026.
Hash Rate Growth: Riot has raised its Q4 2025 hash rate forecast to 40 exahash, representing a 26% year-over-year growth. The company also provided an initial Q1 2026 hash rate forecast of 45 exahash, aiming to maintain a 4% share of the global Bitcoin network.
Capital Expenditures: Riot plans to fund its 2025 capital expenditures fully with its current cash reserves, including investments in new Bitcoin miners and data center development.
Market Dynamics and Power Availability: Riot anticipates a long-term gap between power demand and supply, particularly in high-demand markets like Dallas and Austin. The company is positioned to capitalize on this with its fully permitted and readily available power capacity.
Strategic Land Acquisitions: Riot has acquired additional land around its Corsicana site, now totaling 858 acres, to ensure flexibility for future data center development and to accommodate tenant requirements.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Could you talk about the decision to monetize Bitcoin generation and how you're thinking about the HODL strategy in the back half of the year or longer term?
A:Jason Chung explained that the decision to sell Bitcoin production was part of their financing strategy to cover operating costs and minimize the need to issue into the ATM. This approach allows them to focus financing on growth opportunities that are value accretive to shareholders. As Bitcoin prices increase, they may consider expanding financing options.
Q:Can you talk about the pricing dynamics and availability of electricity for HPC, and whether there is a premium for larger power deals?
A:Jason Les stated that demand in the data center market is robust, with insufficient power and infrastructure to meet forecasted demand. He noted that rental rates vary based on tenant type and deal components. While he couldn't confirm a premium for large-scale power, he highlighted significant interest in large power capacities due to the ability to expand beyond initial leases.
Q:Can you provide details on the aspects of the basis of design for the data center side that are clearly defined versus those still being worked on?
A:Jason Les mentioned that the basis of design is foundational for market discussions and lease agreements. Significant progress has been made, and they expect to complete it by the end of the third quarter. The design will serve as a technical strategy to engage with potential customers and tenants.
Q:Have you submitted any RFPs to contractors, and how is the tariff landscape affecting the timing?
A:Jason Les stated that critical infrastructure, such as the 600-megawatt substation, has already been secured and is arriving. They are confident in their strategic approach to procuring long-lead items, and they do not believe lead times will impact their ability to secure a lease.
Q:How critical is the master site design in terms of tenant negotiations, and what are the long-term plans for the Rockdale campus?
A:Jason Les emphasized that the master site design is crucial for engaging with serious counterparties and advancing discussions. For Rockdale, the focus is on scaling the data center business and maximizing power asset value. They aim to transition power capacity to data center leases when the time is right.
Q:What is your Bitcoin mining outlook, and do you aim to maintain a 4% share of the network hash rate?
A:Jason Les explained that the 4% share is not a mandate but a near-term estimate. He noted that scaling challenges for Bitcoin miners could positively impact hash price. Riot focuses on maximizing power portfolio value and expects measured growth in Bitcoin mining, with 26% year-over-year growth from 2024 to 2025 and 10% growth from 2025 to 2026.
Q:Are you receiving feedback that Corsicana is one of the best potential AI HPC data center sites, and how are you planning to utilize the remaining capacity?
A:Jason Les stated that they are focused on building a strong foundation for the data center platform. They plan to build out Corsicana in phases and design it to serve a wide range of customers. The site’s large capacity and growth potential make it attractive to customers with robust demand forecasts.
Q:Can you expand on the infrastructure components for Corsicana and the importance of water access for HPC and AI liquid cooling?
A:Jason Les explained that they have secured plans and approvals for a water line and have a significant retention pond on-site. Cooling technologies are becoming more water-efficient, but they are ensuring ample water supply for flexibility. Infrastructure like the substation is already in place, derisking the timeline for power availability.
Q:Are you pursuing a build-to-suit model for Corsicana, or are you considering other options like leasing power and infrastructure?
A:Jason Les confirmed that they are pursuing a build-to-suit model to maximize asset value. They are not building out the site beyond an initial stage without a lease. They are open to discussions but believe the build-to-suit model is the best approach for maximizing value.
Q:How important is the proximity of Corsicana and Rockdale to Dallas and Austin in determining their attractiveness?
A:Jason Les highlighted that Corsicana’s proximity to Dallas, a Tier-1 data center market, and Rockdale’s location near emerging markets like Austin and San Antonio make them attractive. These locations allow for better economics and access to talent and low latency connections.
Q:What are Jonathan Gibbs' top priorities for the summer and fall?
A:Jason Les stated that Jonathan Gibbs’ top priorities are building the data center platform, which includes assembling a team with expertise in data center design and development, and completing the basis of design for Corsicana to advance tenant discussions.
Q:How will Texas Senate Bill 6 affect the cost structure and operations of your mining and HPC activities?
A:Jason Les noted that existing FEAs for Corsicana and Rockdale are not expected to be renegotiated due to the legislation. The bill may impact the 4CP program, but it is too early to speculate. Riot is working to ensure compliance and support for the grid.
Q:Review of Unclear Management Responses
A:Management avoided directly answering whether there is a premium for large-scale power deals, stating only that there is significant interest in large power capacities. Additionally, they did not provide specific details on ongoing tenant negotiations or the exact impact of Texas Senate Bill 6 on their operations.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Center Officer
Chief Center
Co Research
Corsicana
EH
Executive VP
LLC Research
Les
Research Division
SGA
access capital
capital market
charge stock
class capability
cycle
development capability
development center
dispute
hash price
hiring Chief
litigation
market center
mining capability
mining center
mining margin
noncash
operator industry
period decrease
petahash day
pitch
position
power portfolio
price petahash
professional
profitability
rate mining
settlement
spend
world class
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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