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Riot Platforms Reports Stellar Q1 Results Amid Declining Stock Price

3 mins
Updated by Harsh Notariya
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In Brief

  • Strong Bitcoin pricing fuels Riot's record Q1 earnings, exceeding previous performance highs.
  • Yet, Riot's stock faces declines despite the company's record-breaking financial performance.
  • Bitcoin miners face challenges as production costs escalate in tandem with network difficulty.
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Riot Platforms, a US-based Bitcoin mining company, recently unveiled a remarkable financial performance for the first quarter 2024. The company announced total revenues of $79.3 million, a noticeable uptick from $73.2 million during the same period last year.

Riot also reported a net income of $211.8 million, earnings per share of $0.82, and $245.7 million in adjusted EBITDA—new highs for the company’s quarterly financial performance. A significant 131% rise in Bitcoin prices, compared to the same three-month period in 2023, largely accounts for this increase.

Bitcoin Price Surge Drives Record-Breaking Quarter for Riot Platforms

Riot’s report revealed that it secured $5.1 million in power curtailment credits. The number is a boost from $3.1 million last year, demonstrating adept management of operational efficiencies.

The Bitcoin Mining segment alone brought in $74.6 million. The number is significantly higher than last year’s $48.0 million, driven by the favorable Bitcoin pricing environment. Conversely, the Engineering segment declined, generating $4.7 million compared to $16.1 million in the previous year.

Riot maintains a robust financial position with $692.5 million in working capital. It also reported $688.5 million in cash and 8,490 unencumbered Bitcoin valued at approximately $605.6 million as of March 31, 2024.

Additionally, the energization of the Corsicana Facility substation was a significant development in the quarter. The facility is slated to be the world’s largest Bitcoin mining facility upon full development.

Besides the Corsicana Facility, Riot also expects its previous purchase from MicroBT in June 2023 to enhance self-mining hash rate capacity. The deployment of these miners has begun and is projected to conclude by the second half of 2025.

“We remain on track to increase our self-mining hash rate capacity to 31 EH/s by the end of the year, which will nearly triple our existing hash rate capacity. With up to 1 GW of total capacity when fully developed, the Corsicana Facility … gives us a strong foundation upon which we will continue scaling our Bitcoin mining business in the future,” Jason Les, Riot Platform’s CEO, stated.

Read more: 5 Best Platforms To Buy Bitcoin Mining Stocks

Riot Platform's Hash Rate Statistics.
Riot Platform’s Hash Rate Statistics. Source: Riot Platform’s Q1 Report

However, Riot experienced a reduction in its Bitcoin production. Riot mined 1,364 Bitcoins in the first quarter, marking a 36% decrease from the 2,115 Bitcoins produced in Q1 2023.

The downturn in production can be traced back to the soaring Bitcoin network difficulty, which has more than doubled since January 2023. This presents a formidable challenge for miners.

Furthermore, the average cost to mine a single Bitcoin soared to $23,034, dramatically increasing from $9,438 in the previous year. This surge reflects the 89% increase in the global network hash rate over the same period. At the same time, it also presents the escalating operational challenges in the mining industry.

Indeed, the mining sector remains fraught with challenges. The escalating electricity costs and the impending reduction in Bitcoin supply due to the halving event could squeeze operational margins. Regarding the current Bitcoin production cost, Charles Edwards, founder of Capriole Fund, shared his perspectives.

“This means 1 of 3 things happens now: 1. Price skyrockets, 2. ~15% of miners shut down, 3. Transaction fees remain a lot higher on average,” Edwards wrote while admitting he is “expecting a bit of all three.”

In response to the latest outlook, analysts see some miners might diversify their business into emerging technologies such as artificial intelligence (AI). Analysts consider this shift a strategic move to mitigate the risks of the volatile crypto market while leveraging their computational power beyond crypto mining.

However, a January 2024 study by CoinShares suggests that miners with substantial Bitcoin reserves and robust capitalization are better positioned in bullish markets. In contrast, those with limited cash reserves and high operational costs per Bitcoin face heightened risks.

Riot’s strong performance in Q1 has yet to affect the company’s stock price positively. The stock price has decreased by 11.77% over the past five days.

Read more: Best Crypto Mining Stocks to Buy or Watch Now

RIOT Price Performance.
RIOT Price Performance. Source: Google Finance

The broader timeframe presents a similar picture, with RIOT down 36.28% from its year-to-date peak price of $17.62. At the time of writing, RIOT’s price is $9.82 during after-hours trading.

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Lynn Wang
Lynn Wang is a seasoned journalist at BeInCrypto, covering a wide range of topics, including tokenized real-world assets (RWA), tokenization, artificial intelligence (AI), regulatory enforcement, and investments in the crypto industry. Previously, she led a team of content creators and journalists for BeInCrypto Indonesia, focusing on the adoption of cryptocurrencies and blockchain technology in the region, as well as regulatory developments. Prior to that, at Value Magazine, she covered...
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