Riot Platforms (NASDAQ:RIOT) Inc, a leader in the cryptocurrency industry, reported significant gains in its third quarter financial results released on Tuesday. The company’s strategic growth and operational efficiencies resulted in increased bitcoin production and lower mining costs, with revenue increasing from $46.3 million to $51.9 million year-over-year.
Riot mined 1,106 bitcoins at a cost of $5,537 per bitcoin, well below the industry average. These figures demonstrate Riot’s position as a leader in low-cost bitcoin production. The company also has $290 million in cash reserves and a large bitcoin inventory.
Total revenue consisted of $31.2 million from bitcoin mining, $5.1 million from data center hosting, and $15.5 million from engineering revenue. Despite a strategic shift away from legacy contracts resulting in a decline in Data Center Hosting revenue, Engineering revenue remained steady.
In Q3, Riot expanded its bitcoin revenue and improved liquidity through strategic stock offerings. The company raised $100 million through the sale of 10.2 million shares of common stock, strengthening its position ahead of the anticipated “halving” event in the crypto mining sector.
Riot Platforms also earned $49.6 million in power reduction credits, demonstrating its innovative approach to managing costs and maximizing efficiencies. These credits represent a significant increase from the $13.1 million earned in the prior year’s third quarter, or the equivalent of approximately 1,757 bitcoins.
Despite facing infrastructure challenges such as the winter storm damage in Texas, Riot has demonstrated operational resilience and adaptability. The company projects a hash rate capacity of 12.5 EH/s for Q4 and beyond.
To further strengthen its operations, Riot has entered into a long-term purchase agreement with MicroBT Electronics Technology Co., LTD for the deployment of 33,280 bitcoin miners through mid-2024. This move could potentially increase Riot’s self-mining hash rate capacity to 20.2 EH/s.
However, the company posted a net loss of $45.3 million for the quarter, including significant non-cash charges such as stock-based compensation, depreciation, and impairment of bitcoin. Despite this, Riot’s liquidity remains robust with $290 million in cash and 7,327 bitcoins on hand, representing nearly $500 million in combined liquidity.
Riot’s August 2023 ATM offering raised significant capital, with net proceeds of approximately $126.0 million from share sales during Q3 and an additional $101.1 million after the end of the quarter. Adjusted EBITDA for the third quarter of 2023 was reported at $31.6 million, representing significant growth over the same period in 2022.
