Riot Platforms, Inc. (NASDAQ: RIOT) (“Riot” or “the
Company”), an industry leader in vertically integrated
Bitcoin (“BTC”) mining, reports financial results for the full year
ended December 31, 2023. The audited financial statements are
available on Riot’s website and here.
“I am pleased to announce results for Riot for
2023, which proved to be another milestone year in Riot’s ongoing
development as a leading vertically integrated Bitcoin miner,” said
Jason Les, CEO of Riot. “We achieved record results in 2023,
generating all-time highs of $281 million in total revenues, 6,626
Bitcoin produced, and $71 million in power credits earned from our
unique power strategy.
“In addition to our record financial performance
in 2023, Riot achieved significant progress across our key
strategic development targets, including: (i) completion of our 700
megawatt Rockdale Facility expansion; (ii) successful scaling of
our power strategy, which drove our industry-leading low cost to
mine in FY 2023 to $7,539 per Bitcoin; (iii) a landmark partnership
with MicroBT to lock-in a long-term, fixed-price supply of
latest-generation miners, ensuring that Riot operates among the
most efficient mining fleets in our industry; and (iv) ongoing
development of our 1 gigawatt Corsicana Facility, which will begin
energization at the end of Q1 2024 and which, when fully developed,
will be the largest dedicated Bitcoin mining facility in the
world.
“At the same time, Riot has also further
enhanced our already industry-leading balance sheet strength,
ending 2023 with approximately $597 million in cash, 7,362 Bitcoin,
worth approximately $311 million based on year-end Bitcoin prices,
and nominal long-term debt. As a leading vertically integrated
Bitcoin miner, coupling development of our Corsicana Facility with
a secured supply of leading-edge miners from MicroBT, and our
strong balance sheet gives Riot the most secure, visible path in
our industry to achieving our growth plans. Our targets are to
reach 28 EH/s in total hash rate capacity by the end of 2024, 38
EH/s by the end of 2025, and ultimately 100 EH/s and beyond.”
Fiscal Year 2023 Financial and
Operational Highlights
Key financial and operational highlights for the
fiscal year ended December 31, 2023 include:
- Total revenue of
$280.7 million, as compared to $259.2 million for the same period
in 2022, primarily driven by higher Bitcoin production and higher
price for Bitcoin.
- Earned $71.2
million in power credits through support of the ERCOT grid in Texas
during several weather-related supply/demand issues in 2023. The
amount of power credits earned equated to approximately 2,497
Bitcoin, as computed by using average daily closing Bitcoin prices
on a monthly basis.
- Produced 6,626
Bitcoin, as compared to 5,554 during the same twelve-month period
in 2022, a 19% increase, notwithstanding the impact of the
Company’s effective employment of its power strategy, under which
Bitcoin production was suspended while the Company received
significant benefits from power credits earned.
- Bitcoin Mining
revenue of $189.0 million, as compared to $156.9 million during the
same twelve-month period in 2022. The increase in Bitcoin Mining
revenue was driven by slightly higher values of Bitcoin mined in
2023, which averaged $28,859 per Bitcoin as compared to an average
price of $28,245 per Bitcoin in 2022, as well as more Bitcoin mined
in 2023 from an increase in miners deployed.
- Data Center
Hosting revenue of $27.3 million, as compared to $36.9 million for
the same twelve-month period in 2022. The decrease is primarily
attributable to the termination of certain hosting agreements
during the period.
- Engineering
revenue of $64.3 million, as compared to $65.3 million for the same
twelve-month period in 2022.
- Reported a net
loss of $49.5 million, as compared to a net loss of $509.6 million
in the same period in 2022, which was significantly impacted by
non-cash impairment charges totaling $538.6 million in 2022.
- Reported
non-GAAP Adjusted EBITDA of $214.0 million in 2023 which included a
$184.7 million gain on Bitcoin held on the balance sheet. In
December 2023, the FASB issued ASU 2023-08, under which, Riot
recognizes its Bitcoin held at fair value, with changes in the fair
value recognized in income. Riot elected to early adopt this
guidance in 2023.
- Maintained
industry–leading financial position, with $887.6 million in net
working capital, including $597.2 million in cash on hand, nominal
long-term debt, and 7,362 Bitcoin, all of which were produced by
the Company’s self-mining operations, as of December 31, 2023.
- Riot’s cost to
mine Bitcoin for 2023, net of power credits allocated to
self-mining, averaged $7,539 per Bitcoin versus $11,225 in 2022, a
decrease of 33% year-over-year.
- Increased hash
rate capacity by 28% to 12.4 exahash per second (“EH/s”) as of
December 31, 2023, compared to 9.7 EH/s as of December 31,
2022.
Fiscal Year 2023 Financial
Results
Total revenue for the year ended December 31,
2023, was $280.7 million, and consisted of $189.0 million in
Bitcoin Mining revenue, $27.3 million in Data Center Hosting
revenue, $64.3 million in Engineering revenue, and $0.1 million in
other revenue.
Bitcoin Mining revenue in excess of mining cost
of revenue for the year ended December 31, 2023, was $92.4 million
(48.9% of mining revenue), as compared to $82.5 million (52.6% of
mining revenue) for the same twelve-month period in 2022, an
increase of $9.9 million. Bitcoin Mining cost of revenue consists
primarily of direct production costs of mining operations,
including electricity, labor, and insurance, but excluding
depreciation and amortization. The increase in Bitcoin Mining cost
of revenue in 2023 is primarily due to the increase in mining
capacity at the Rockdale Facility, which requires more headcount
and direct costs necessary to maintain and support the mining
operations.
Data Center Hosting cost in excess of revenue
for the year ended December 31, 2023, was $69.8 million. Data
Center Hosting costs consisted primarily of direct power costs,
with the balance primarily incurred for compensation and rent
costs.
Engineering revenue in excess of engineering
cost of revenue for the year ended December 31, 2023 was $3.7
million. Engineering cost of revenue for 2023 consisted primarily
of direct materials and labor, as well as indirect manufacturing
costs.
Under Riot’s long-term power agreements, the
Company has the ability to return unused power and receive power
credits at market-driven spot prices. Power credits received from
these activities totaled $71.2 million for the twelve-month period
ended December 31, 2023, as compared to $27.3 million during the
same twelve-month period in 2022, equating to approximately 2,497
Bitcoin as computed by using average daily closing Bitcoin prices
on a monthly basis.
If power credits were directly allocated between
Bitcoin Mining cost of revenue and Data Center Hosting cost of
revenue based on proportional power consumption, Bitcoin Mining
cost of revenue would have decreased by $46.6 million, increasing
Bitcoin Mining revenue in excess of Bitcoin Mining cost of revenue
to $139.0 million (73.6% of Bitcoin Mining revenue) on a non-GAAP
basis, while Data Center Hosting cost of revenue would have
decreased by $24.6 million, and Data Center Hosting revenue in
excess of Data Center Hosting cost of revenue would equal $(45.2)
million ((165.9)% of Data Center Hosting revenue) on a non-GAAP
basis.
Selling, general and administrative expenses
during the year ended December 31, 2023 totaled $100.3 million, as
compared to $67.5 million for the same twelve-month period in 2022.
The increase of $32.9 million was primarily attributable to an
increase in compensation expense, which increased by $12.2 million
as a result of hiring additional employees to support Riot's
ongoing growth, increased stock-based compensation of $7.6 million
due to the adoption of the long-term incentive plan and additional
headcount, increased legal and professional fees of $8.1 million
primarily related to ongoing litigation and public company
compliance, and an increase of $5.0 million in other general
operating costs such as insurance and information technology
projects to support the Company’s growth.
Net loss for 2023 was $(49.5) million, or
$(0.28) per share, compared to a net loss of $(509.6) million, or
$(3.65) per share in 2022. The net loss in 2023 included non-cash
stock-based compensation of $32.2 million and depreciation and
amortization of $252.4 million. Net loss in 2023 was impacted by
the early adoption of ASU 2023-08, which was issued by FASB in
December 2023, under which Riot recognizes its Bitcoin held at fair
value, with changes in the fair value recognized in income.
Non-GAAP Adjusted EBITDA for the twelve-month
period ended December 31, 2023, was $214.0 million, as compared to
Non-GAAP Adjusted EBITDA of $(67.2) million for the same
twelve-month period in 2022. Non-GAAP Adjusted EBITDA in 2023 was
impacted by the early adoption of ASU 2023-08, which was issued by
FASB in December 2023, under which Riot recognizes its Bitcoin held
at fair value, with changes in the fair value recognized in
income.
Hash Rate Growth
Riot plans to energize the first building
(Building A1) at its new Corsicana Facility at the end of Q1 2024.
Miners will be brought online in batches over the first several
weeks of April 2024. Building A2 is expected to be completed and
brought online towards the end of Q2 2024, with Buildings B1 &
B2 being brought online during the third and fourth quarters of
2024.
At this pace, Riot’s self-mining hash rate is
expected to grow from 12.4 EH/s to over 28 EH/s by the end of 2024.
Phase II of the Corsicana Facility will bring two additional
buildings online by the end of 2025, increasing total self-mining
hash rate to over 38 EH/s.
About Riot Platforms, Inc.
Riot’s (NASDAQ: RIOT) vision is to be the
world’s leading Bitcoin-driven infrastructure platform.
Our mission is to positively impact the sectors,
networks and communities that we touch. We believe that the
combination of an innovative spirit and strong community
partnership allows the Company to achieve best-in-class execution
and create successful outcomes.
Riot is a Bitcoin mining and digital
infrastructure company focused on a vertically integrated strategy.
The Company has Bitcoin mining operations in central Texas, and
electrical switchgear engineering and fabrication operations in
Denver, Colorado.
For more information, visit
www.riotplatforms.com.
Safe Harbor
Statements in this press release that are not
historical facts are forward-looking statements that reflect
management’s current expectations, assumptions, and estimates of
future performance and economic conditions. Such statements rely on
the safe harbor provisions of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934.
Because such statements are subject to risks and uncertainties,
actual results may differ materially from those expressed or
implied by such forward-looking statements. Words such as
“anticipates,” “believes,” “plans,” “expects,” “intends,” “will,”
“potential,” “hope,” and similar expressions are intended to
identify forward-looking statements. These forward-looking
statements may include, but are not limited to, statements about
the benefits of acquisitions, including financial and operating
results, and the Company’s plans, objectives, expectations, and
intentions. Among the risks and uncertainties that could cause
actual results to differ from those expressed in forward-looking
statements include, but are not limited to: unaudited estimates of
Bitcoin production; our future hash rate growth (EH/s); the
anticipated benefits, construction schedule, and costs associated
with the Navarro site expansion; our expected schedule of new miner
deliveries; our ability to successfully deploy new miners; M.W.
capacity under development; we may not be able to realize the
anticipated benefits from immersion-cooling; the integration of
acquired businesses may not be successful, or such integration may
take longer or be more difficult, time-consuming or costly to
accomplish than anticipated; failure to otherwise realize
anticipated efficiencies and strategic and financial benefits from
our acquisitions; and the impact of COVID-19 on us, our customers,
or on our suppliers in connection with our estimated timelines.
Detailed information regarding the factors identified by the
Company’s management which they believe may cause actual results to
differ materially from those expressed or implied by such
forward-looking statements in this press release may be found in
the Company’s filings with the U.S. Securities and Exchange
Commission (the “SEC”), including the risks, uncertainties and
other factors discussed under the sections entitled “Risk Factors”
and “Cautionary Note Regarding Forward-Looking Statements” of the
Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2023, as amended, and the other filings the Company
makes with the SEC, copies of which may be obtained from the SEC’s
website, www.sec.gov. All forward-looking statements included in
this press release are made only as of the date of this press
release, and the Company disclaims any intention or obligation to
update or revise any such forward-looking statements to reflect
events or circumstances that subsequently occur, or of which the
Company hereafter becomes aware, except as required by law. Persons
reading this press release are cautioned not to place undue
reliance on such forward-looking statements.
For further information, please
contact:
Investor Contact:Phil McPhersonIR@Riot.Inc
303-794-2000 ext. 110
Media Contact:Alexis Brock303-794-2000 ext. 118PR@Riot.Inc
SOURCE: Riot Platforms, Inc.
Non-GAAP Measures of Financial
Performance
In addition to financial measures presented
under generally accepted accounting principles in the United States
of America (“GAAP”), we consistently evaluate our use of and
calculation of the non-GAAP financial measures such as “Adjusted
EBITDA”. Adjusted EBITDA is a financial measure defined as EBITDA
adjusted to eliminate the effects of certain non-cash and/or
non-recurring items that do not reflect our ongoing strategic
business operations, which management believes results in a
performance measurement that represents a key indicator of the
Company’s core business operations of Bitcoin mining. The
adjustments include fair value adjustments such as derivative power
contract adjustments, equity securities value changes, and non-cash
stock-based compensation expense, in addition to financing and
legacy business income and expense items. We believe Adjusted
EBITDA can be an important financial measure becauseit allows
management, investors, and our board of directors to evaluate and
compare our operating results, including our return on capital and
operating efficiencies, from period-to-period by making such
adjustments. Additionally, Adjusted EBITDA is used as a performance
metric for share-based compensation.
Adjusted EBITDA is provided in addition to and
should not be considered to be a substitute for, or superior to,
net income, the most comparable measure under GAAP to Adjusted
EBITDA. Further, Adjusted EBITDA should not be considered as an
alternative to revenue growth, net income, diluted earnings per
share or any other performance measure derived in accordance with
GAAP, or as an alternative to cash flow from operating activities
as a measure of our liquidity. Adjusted EBITDA has limitations as
an analytical tool, and you should not consider this financial
measure either in isolation or as a substitute for analyzing our
results as reported under GAAP.
The following table reconciles Adjusted EBITDA
to Net income (loss), the most comparable GAAP financial
measure:
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31, |
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
Net income (loss) |
|
$ |
(49,472 |
) |
|
$ |
(509,553 |
) |
|
$ |
(15,437 |
) |
Interest (income) expense |
|
|
(8,222 |
) |
|
|
(454 |
) |
|
|
296 |
|
Income tax expense (benefit) |
|
|
(5,093 |
) |
|
|
(11,749 |
) |
|
|
254 |
|
Depreciation and amortization |
|
|
252,354 |
|
|
|
107,950 |
|
|
|
26,324 |
|
EBITDA |
|
|
189,567 |
|
|
|
(413,806 |
) |
|
|
11,437 |
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Stock-based compensation expense |
|
|
32,170 |
|
|
|
24,555 |
|
|
|
68,491 |
|
Acquisition-related costs |
|
|
— |
|
|
|
78 |
|
|
|
21,198 |
|
Change in fair value of derivative asset |
|
|
(6,721 |
) |
|
|
(71,418 |
) |
|
|
(12,112 |
) |
Change in fair value of contingent consideration |
|
|
— |
|
|
|
(159 |
) |
|
|
975 |
|
Realized gain on sale/exchange of long-term investment |
|
|
— |
|
|
|
— |
|
|
|
(26,260 |
) |
Realized loss on sale of marketable equity securities |
|
|
— |
|
|
|
8,996 |
|
|
|
— |
|
Unrealized (gain) loss on marketable equity securities |
|
|
— |
|
|
|
— |
|
|
|
13,655 |
|
Loss (gain) on sale/exchange of equipment |
|
|
5,336 |
|
|
|
(16,281 |
) |
|
|
— |
|
Casualty-related charges (recoveries), net |
|
|
(5,974 |
) |
|
|
9,688 |
|
|
|
— |
|
Impairment of goodwill |
|
|
— |
|
|
|
335,648 |
|
|
|
— |
|
Impairment of miners |
|
|
— |
|
|
|
55,544 |
|
|
|
— |
|
Other (income) expense |
|
|
(260 |
) |
|
|
59 |
|
|
|
(2,378 |
) |
License fees |
|
|
(97 |
) |
|
|
(97 |
) |
|
|
(97 |
) |
Adjusted EBITDA |
|
$ |
214,021 |
|
|
$ |
(67,193 |
) |
|
$ |
74,909 |
|
In addition to Adjusted EBITDA , we believe
“Bitcoin Mining revenue in excess of cost of revenue, net of power
curtailment credits”, “Data Center Hosting revenue in excess of
cost of revenue, net of power curtailment credits”, “Cost of
revenue – Bitcoin Mining, net of power curtailment credits” and
“Cost of revenue – Data Center Hosting, net of power curtailment
credits” are additional non-GAAP performance metrics that represent
a key indicator of the Company’s core business operations of both
Bitcoin Mining and Data Center Hosting.
We believe our ability to offer power back to
the grid at market-driven spot prices, thereby reducing our
operating costs, is integral to our overall strategy, specifically
our power management strategy and our commitment to supporting the
ERCOT power grid. While participation in various grid demand
response programs may impact our Bitcoin production, we view this
as an important part of our partnership-driven approach with ERCOT
and our commitment to being a good corporate citizen in our
communities.
We also believe netting power credits against
our costs can be an important financial measure because it allows
management, investors, and our board of directors to evaluate and
compare our operating results, including our operating
efficiencies, from period-to-period by making such adjustments. We
have allocated the benefit of the power sales to our Bitcoin Mining
and Data Center Hosting segments based on their proportional power
consumption during the periods presented.
Bitcoin Mining revenue in excess of cost of
revenue, net of power curtailment credits, Data Center Hosting
revenue in excess of cost of revenue, net of power curtailment
credits, Cost of revenue – Bitcoin Mining, net of power curtailment
credits and Cost of revenue – Data Center Hosting, net of power
curtailment credits are provided in addition to and should not be
considered to be a substitute for, or superior to Revenue – Bitcoin
Mining, Revenue – Data Center Hosting, Cost of revenue – Bitcoin
Mining or Cost of revenue – Data Center Hosting as presented in our
Consolidated Statements of Operations.
The following table presents reconciliations of
these non-GAAP performance metrics to the most comparable GAAP
financial measures:
|
|
Years Ended December 31, |
|
|
2023 |
|
|
2022 |
|
|
2021 |
|
Bitcoin
Mining |
|
|
|
|
|
|
|
|
|
Revenue (A) |
|
$ |
188,996 |
|
|
$ |
156,870 |
|
|
$ |
184,422 |
|
Cost of revenue |
|
|
96,597 |
|
|
|
74,335 |
|
|
|
45,513 |
|
Bitcoin Mining revenue in
excess of cost of revenue (B) |
|
|
92,399 |
|
|
|
82,535 |
|
|
|
138,909 |
|
|
|
|
|
|
|
|
|
|
|
Power curtailment credits
allocated to Bitcoin Mining |
|
|
46,646 |
|
|
|
11,991 |
|
|
|
— |
|
Bitcoin Mining revenue in
excess of cost of revenue, net of power curtailment credits
(C) |
|
$ |
139,045 |
|
|
$ |
94,526 |
|
|
$ |
138,909 |
|
|
|
|
|
|
|
|
|
|
|
Bitcoin Mining revenue in
excess of cost of revenue, as a percentage of revenue (B/A) |
|
|
48.9 |
% |
|
|
52.6 |
% |
|
|
75.3 |
% |
Bitcoin Mining revenue in
excess of cost of revenue, net of power curtailment credits, as a
percentage of revenue (C/A) |
|
|
73.6 |
% |
|
|
60.3 |
% |
|
|
75.3 |
% |
|
|
|
|
|
|
|
|
|
|
Data Center
Hosting |
|
|
|
|
|
|
|
|
|
Revenue (A) |
|
$ |
27,282 |
|
|
$ |
36,862 |
|
|
$ |
24,546 |
|
Cost of revenue |
|
|
97,122 |
|
|
|
61,906 |
|
|
|
32,998 |
|
Data Center Hosting revenue in
excess of cost of revenue (B) |
|
|
(69,840 |
) |
|
|
(25,044 |
) |
|
|
(8,452 |
) |
|
|
|
|
|
|
|
|
|
|
Power curtailment credits
allocated to Data Center Hosting |
|
|
24,569 |
|
|
|
15,354 |
|
|
|
6,514 |
|
Data Center Hosting revenue in
excess of cost of revenue, net of power curtailment credits
(C) |
|
$ |
(45,271 |
) |
|
$ |
(9,690 |
) |
|
$ |
(1,938 |
) |
|
|
|
|
|
|
|
|
|
|
Data Center Hosting revenue in
excess of cost of revenue, as a percentage of revenue (B/A) |
|
|
(256.0 |
)% |
|
|
(67.9 |
)% |
|
|
(34.4 |
)% |
Data Center Hosting revenue in
excess of cost of revenue, net of power curtailment credits, as a
percentage of revenue (C/A) |
|
|
(165.9 |
)% |
|
|
(26.3 |
)% |
|
|
(7.9 |
)% |
|
|
|
|
|
|
|
|
|
|
Allocation of Power
Curtailment Credits |
|
|
|
|
|
|
|
|
|
Consolidated power curtailment
credits |
|
|
71,215 |
|
|
|
27,345 |
|
|
|
6,514 |
|
Percentage of consolidated
power curtailment credits allocated to Bitcoin Mining |
|
|
65.5 |
% |
|
|
43.9 |
% |
|
|
0.0 |
% |
Percentage of consolidated
power curtailment credits allocated to Data Center Hosting |
|
|
34.5 |
% |
|
|
56.1 |
% |
|
|
100.0 |
% |
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/91efab5f-81fa-45ab-9f19-10ad51d2a2d6
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