Riot Platforms Achieves 65% Revenue Growth Amid Mining Expansion Challenges

Riot Platforms Achieves 65% Revenue Growth Amid Mining Expansion Challenges

Riot Platforms, a prominent Bitcoin mining company, reported a substantial 65% year-over-year revenue growth for the third quarter of 2024, highlighting its resilience despite facing obstacles in expanding its mining operations within the United States. The firm generated $84.8 million in revenue during this period, primarily driven by an impressive increase in its deployed hashrate, which enabled Riot to mine 1,104 Bitcoin in the quarter, a steady production level compared to the same timeframe last year, even following the recent Bitcoin halving event.

Hashrate Expansion Drives Revenue Growth

The company’s significant hashrate expansion contributed to this revenue surge, achieving a remarkable 159% increase year-over-year to reach 28 exahashes per second (EH/s) by the end of September. However, despite this revenue boost, Riot reported a net loss of $154 million or $0.54 per share for the quarter, marking a staggering 92% increase in losses from Q3 2023. CEO Jason Les attributed the larger loss to several factors, including decreased power credits, rising operating expenses, and the effects of the Bitcoin halving on earnings.

Riot maintained a competitive average Bitcoin mining cost of $35,376, approximately half of the current market price. Les emphasized the company's commitment to energy efficiency, stating, "Our energy efficiency allowed us to achieve an industry-leading all-in cost of power of 3.1 cents per kilowatt-hour." Additionally, Riot reported a robust balance sheet with around $1.3 billion in cash and equity securities and 10,427 Bitcoin valued at approximately $750 million.

Ambitious Future Plans Amid Adjusted Projections

Looking to the future, Riot has set ambitious expansion goals despite the challenges it currently faces. Les expressed optimism about the company’s capacity and hashrate growth at its Texas and Kentucky facilities, with a long-term aim of reaching 100 EH/s in self-mining capacity. However, Riot has adjusted its projections due to delays in its operations, lowering its year-end hashrate target to 34.9 EH/s from the previously expected 36.3 EH/s. The company cited slower-than-anticipated progress at its newly acquired Kentucky facilities.

Riot also revised its 2025 hashrate goal to 46.7 EH/s, down from an earlier target of 56.6 EH/s, primarily due to extended lead times for infrastructure upgrades at its Corsicana facility in Texas. Despite these adjustments, the company remains optimistic about achieving a hashrate of 65.7 EH/s by the end of 2026 once all facilities are fully operational.

Stock Market Response and Market Dynamics

Despite the positive revenue growth reported by Riot Platforms, the company's stock (RIOT) experienced a 3.6% decline, trading at $9.86 in after-hours trading on October 30. The stock has fallen 32% since the beginning of the year and remains significantly lower than its all-time high of over $70 reached in February 2021.

The Bitcoin mining sector, including Riot Platforms, has been recalibrating its operations following the recent halving event on April 20, which reduced mining rewards from 6.25 BTC to 3.125 BTC, equivalent to approximately $180,600 at current market rates. Industry experts, such as Markus Thielen, head of research at 10x Research, have predicted that Bitcoin miners may liquidate up to $5 billion worth of BTC in the months following the halving, creating potential market implications.