Riot Platform Reports First Quarter Net Profit of $211 Million Amid Low BTC Production Issues

Key Takeaways

Riot’s Bitcoin mining revenue increased 55.4% year over year to $74.6 million.

Riot is struggling with declining Bitcoin production and rising mining costs.

Leading Bitcoin mining company Riot Platforms announced its first quarter 2024 results on May 1, showing a financially mixed quarter. The company achieved record net income of $211.8 million, a 1,000% increase over the previous year.

The high net profit was due to the surge in Bitcoin price during the quarter. Riot’s Bitcoin mining revenue increased 55.4% year over year to $74.6 million. Despite this growth, these gains were partially offset by lower Bitcoin production (down 36% compared to Q1 2023) and increased mining costs. The increase in mining costs is due to a 144% increase in the average cost per Bitcoin mined ($23,000), which is primarily due to an 89% increase in the global network hash rate.

“We are encouraged by the significant increase in net income,” said Riot CEO Jason Les. “This reflects the rising price of Bitcoin and the benefits of our continued expansion efforts.” The company produced 1,364 tokens, a 36% decrease compared to the first quarter of 2023. Bitcoin mining costs jumped from $9,438 to $23,034 per token in the same period in 2023.

Despite the decline in production, Riot remains optimistic about the future. The company recently announced a new facility in Texas, which it aims to be the world’s largest dedicated Bitcoin mining facility once completed. This expansion is expected to increase Riot’s hash rate capacity from 12.4 EH/s to 31 EH/s by the end of 2024.

They also expect the Texas facility to reach 41EH/s once fully deployed in 2025, with a long-term goal of reaching 100EH/s by 2027. Riot has the third-largest hash rate among miners, behind Marathon Digital (24.7). EH/s) and Core Scientific (16.9 EH/s).

This news comes amid ongoing adjustments for Bitcoin miners following the April 2024 halving event, which reduced the block reward for mining a new Bitcoin from 6.25 BTC to 3.125 BTC. Halving, a key software code update, has made life more difficult for miners as it is expected to drastically reduce profits while further improving production costs. While the price of Bitcoin rose in the first quarter, the production of new coins decreased significantly as mining difficulty soared during the same period.

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