Riot Platforms Swings to Q2 Profit

Core Insights - Riot Platforms reported a revenue of $153 million for fiscal Q2 2025, marking a 5% decline quarter-over-quarter, but achieved a net income of $219.5 million, reversing a previous GAAP net loss due to Bitcoin appreciation [1] Group 1: Shift to Data Centers - Riot is transitioning to high-performance computing (HPC) data centers, having hired Jonathan Gibbs as Chief Data Center Officer and acquired 858 acres in Corsicana to support up to 1 gigawatt of capacity [3][4] - This strategic shift aims to capitalize on higher valuation multiples in the data center sector, moving beyond Bitcoin mining cyclicality and establishing a presence in the expanding HPC infrastructure market [4] Group 2: Operational Efficiency - Riot increased its self-mining hash rate by 5% quarter-over-quarter to 35.4 exahash, while producing 1,406 bitcoins, a slight decrease from 1,530 bitcoins in the previous quarter [5] - Year-over-year hash rate utilization improved from 61% to 87%, contributing to a 50% gross margin for the Bitcoin mining segment, positioning Riot among the most efficient miners in the industry [5][6] Group 3: Financial Strategy - Riot ended the quarter with $330 million in cash and over 19,000 bitcoins, equating to $2.4 billion in liquidity, and secured a $200 million Bitcoin-collateralized loan with Coinbase [7] - The company continues to sell its monthly Bitcoin production to finance operations while minimizing stock issuance through at-the-market equity, thereby preserving shareholder value [8][9] Group 4: Future Guidance - Management raised self-mining hash rate guidance for fiscal Q4 2025 from 38.4 exahash to 40 exahash, with a target of 45 exahash for fiscal Q1 2026, aiming to maintain a 4% global network share through 2026 [10] - The basis of design for the Corsicana data center is expected to be completed by the end of fiscal Q3 2025, supported by secured infrastructure for 600 megawatts and land for up to 1 gigawatt of capacity [11]