Release Date: February 24, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Riot Platforms Inc (RIOT, Financial) increased its self-mining hash rate by 154% in 2024, significantly outpacing the global hash rate increase of 67%.
- The company ended 2024 holding 17,722 Bitcoin, a 141% increase from the previous year, reflecting a strong Bitcoin yield strategy.
- Riot Platforms Inc (RIOT) reported a 34% increase in total revenue for 2024, driven by higher Bitcoin prices.
- The acquisition of E4A Solutions is expected to enhance Riot's engineering business, offering higher-margin recurring services revenues.
- Riot Platforms Inc (RIOT) plans to grow its Bitcoin mining hash rate by approximately 22% in 2025, while also pursuing AI/HPC opportunities to maximize asset value.
Negative Points
- Riot Platforms Inc (RIOT) produced 27% less Bitcoin in 2024 compared to 2023, primarily due to the Bitcoin halving event.
- The company's Bitcoin mining gross profit margin decreased from 87% in 2023 to 52% in 2024.
- Power costs increased significantly, with the cost to mine a Bitcoin rising to $42,011, largely due to elevated spot market rates.
- Riot's engineering business revenue decreased from $64.3 million in 2023 to $38.5 million in 2024, impacted by supply chain constraints.
- The company incurred approximately $22 million in one-off costs in Q4 2024, including litigation and M&A expenses, affecting overall profitability.
Q & A Highlights
Q: As you engage with hyperscalers, are you seeing a widening window for power availability beyond 2025?
A: Jason Les, CEO, stated that power is extremely valuable in 2025, but any power available in 2026 and 2027 is also highly valuable. The demand for AI/HPC is expected to be around 30 gigawatts over the next five years, and Riot's assets are well-positioned to meet this demand.
Q: How are you approaching potential HPC transactions with hyperscalers?
A: Jason Les, CEO, explained that Riot is pursuing multiple tracks to maximize value. They are engaging with hyperscalers, infrastructure partners, and financing partners to explore various opportunities. The focus is on finding the most value-maximizing approach.
Q: Can Corsicana accommodate additional capacity beyond the targeted 1 gigawatt?
A: Jason Les, CEO, mentioned that Corsicana is an excellent site with 1 gigawatt interconnect approved and power capacity available. Riot is expanding its land portfolio at Corsicana to increase optionality and accommodate a wide range of market needs.
Q: What is your main priority when considering terms for potential HPC deals?
A: Jason Les, CEO, emphasized the importance of having a blue-chip counterparty to drive financing terms and valuations. The type of counterparty is crucial for maximizing shareholder value, and Riot is focused on securing long-term agreements with credible partners.
Q: Are there any operational goals for 2025 on the mining side?
A: Jason Les, CEO, stated that Riot aims to increase its hash rate by approximately 22% in 2025, driven by expansion at their Kentucky facilities. The focus will be on operational excellence, improving uptime, and executing their power strategy.
Q: How does Riot plan to manage dilution while driving higher Bitcoin yield?
A: Jason Les, CEO, explained that minimizing dilution is key to achieving higher Bitcoin yield. Riot focuses on low-cost production and seeks alternative financing methods to enhance Bitcoin yield while being cautious with equity issuance.
Q: How do you view the relationship between Bitcoin mining and AI/HPC opportunities?
A: Jason Les, CEO, stated that Bitcoin mining has positioned Riot at the center of two rapidly growing industries. The AI/HPC opportunity provides another way to utilize energy assets and generate substantial returns, offering a diversified path to greater shareholder value.
Q: Are there any plans to spin off either the Bitcoin or AI/HPC business?
A: Jason Les, CEO, indicated that Riot is focused on leveraging both Bitcoin and AI/HPC opportunities to create value. The company believes that being flexible and opportunistic will provide shareholders with diversified returns, and there are no current plans to spin off either business.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
