Riot Platforms(RIOT)2024-05-01 15:02Financial Data and Key Metrics - Revenue for Q1 2024 was $79.3 million, an 18% increase YoY, driven by a 131% increase in average Bitcoin prices, offset by a 36% decrease in Bitcoin production [43] - Bitcoin mined in Q1 2024 was 1,364, a 36% decrease YoY due to a significant increase in Bitcoin network difficulty [41] - Net income for Q1 2024 was $211.8 million, compared to $18.5 million in Q1 2023, including a $234.1 million change in the fair value of Bitcoin [46] - Non-GAAP adjusted EBITDA for Q1 2024 was $245.7 million, compared to $81.7 million in Q1 2023 [45] - Power curtailment credits received in Q1 2024 totaled $5.1 million, compared to $3.1 million in Q1 2023 [44] Business Line Data and Key Metrics - Bitcoin mining revenue in Q1 2024 was $74.6 million, including $32 million in hosting revenue, a $26.6 million increase YoY [48] - Engineering business revenue in Q1 2024 was $4.7 million, a $11.4 million decrease YoY due to global supply chain constraints [55] - Bitcoin mining cost of revenue in Q1 2024 was $23,034 per Bitcoin, with power costs accounting for 73% of the total [52] Market Data and Key Metrics - The company ended Q1 2024 with 8,490 Bitcoin, up significantly from 7,094 Bitcoin at the end of Q1 2023 [41] - The company anticipates achieving a total self-mining hashrate capacity of 31 exahash by the end of 2024 [65] - The Corsicana facility, once fully developed, will have a total capacity of 1 gigawatt, making it the largest dedicated Bitcoin mining facility in North America [59] Company Strategy and Industry Competition - The company's strategy focuses on being a vertically integrated Bitcoin mining company, with key pillars including significant scale, low-cost production, and a strong balance sheet [8] - The company has developed a fully funded growth plan, with the Corsicana facility expected to increase self-mining hashrate to 31 exahash by the end of 2024 [10] - The company is leveraging its power strategy to drive down costs and maintain a low cost of production, positioning it well for trough periods in Bitcoin mining economics [21] Management Commentary on Operating Environment and Future Outlook - Management highlighted the challenges posed by the Bitcoin halving event but noted that the company is well-positioned to navigate these challenges due to its low-cost production strategy [15] - The company expects to resolve supply chain issues impacting its engineering business by the end of Q3 2024, which will allow it to recognize revenue from delayed projects [56] - Management remains confident in achieving the 31 exahash target by the end of 2024, despite potential challenges in development and deployment [104] Other Important Information - The company has terminated its data center hosting business and consolidated results into the Bitcoin mining segment, focusing on maximizing Bitcoin mining results [14] - The company has adjusted its depreciation schedule for mining hardware from two years to three years, based on market practice and operational history [47] - The company has a long-term agreement with MicroBT for the purchase of next-generation miners, with options for an additional 75 exahash of miners [60] Q&A Session Summary Question: How is the company managing Bitcoin inventory post-halving? - The company is focused on maintaining a strong balance sheet and holding as much Bitcoin as possible, while monitoring financing options and cost of capital [76][77] Question: What is the outlook for the engineering business? - The engineering business is expected to see improved performance in the second half of 2024 as supply chain issues are resolved and manufacturing capacity is expanded [82] Question: What are the challenges in reaching the 31 exahash target? - The company is confident in achieving the target, with challenges being minor operational issues that are expected in large-scale development projects [104][110] Question: Will the company consider M&A opportunities with hosting agreements? - The company is open to M&A opportunities that align with its strategic goals, even if they include hosting agreements, but prefers to focus on organic growth [108][112] Question: What is the company's strategy for future growth beyond Corsicana? - The company is open to smaller-scale opportunities and is exploring new sites both within and outside of Texas, with a focus on low-cost power [90][92]