Riot Platforms lowers Hash rate forecast, reports $154 million net loss in Q3

Riot Platforms reports a large loss in Q3 due to rising costs and unrealized investment losses, while also reducing its 2024 and beyond hash rate targets. In the quarter ended September 30, Riot recorded total revenue of $84.8 million, of which $67.5 million came from Bitcoin mining operations. Gross profit from Bitcoin mining, excluding depreciation, was $28.4 million with a 42% margin, down sharply from 181% in the same period last year. The main factors leading to this decline were higher costs for electricity, labor, and insurance. Riot reported a net loss of $154.4 million, or $0.54 per share, compared to a loss of $84.4 million ($0.32 per share) in Q2 and a loss of $0.44 per share in the year-ago quarter. This figure was also significantly lower than the consensus forecast of a $0.18 per share loss. The expanded loss includes $38 million in unrealized losses from marketable securities, $30.6 million in non-cash stock-based compensation expenses, and $60 million in depreciation and asset impairment. Non-GAAP adjusted EBITDA recorded a loss of $3.6 million in the quarter, slightly deeper than the $3.1 million loss in the same period last year. Despite the halving event in April and increased network difficulty, Riot Platforms produced 1,104 Bit in the quarter, nearly matching the 1,106 BTC from a year earlier. The company had previously reported a 52% year-over-year decline in the prior quarter. "Riot ended the quarter with a strong balance sheet, holding approximately $1.3 billion in cash, restricted cash, marketable securities, and 10,427 Bit," CEO Jason Les said in the press release. "Looking ahead, I am very optimistic about our path forward as our teams continue to expand our electrical capacity and hash rate in Texas and Kentucky, working towards Riot's goal of 100 EH/s of self-mining." Riot Platforms now expects to achieve 34.9 exahash per second (EH/s) of self-mining hash rate by the end of 2024, lower than the previous target of 36.3 EH/s, due to delays in the expansion of its Kentucky facility, now expected to be operational in 2025. Additionally, the 2025 target has been adjusted from 56.6 EH/s to 46.7 EH/s. A portion of the Kentucky expansion plan and the construction of the Corsicana power station will be delayed until 2026. Riot expects to complete the Corsicana development in 2026, with a total hash rate of 65.7 EH/s across all facilities. Riot's stock fell around 4% in after-hours trading after declining 3.6% during the regular session, and is down approximately 32% YTD.