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After Riot Platforms reported its November results, we updated our fair value and raised our quality score to 3.7. We changed our rating from Buy to Watch and now expect more revenue from the engineering division as it sells electrical equipment to other data centers. We added the long term income from the new AI lab lease at the Corsicana campus to our projections. We also started tracking the shift toward leasing powered land where tenants own the computers, which lowers the amount of capital the company must spend.
Riot reported a profit of 1 cent per share for the quarter, which was much better than the 34 cent loss analysts expected. Revenue reached about $181 million, also beating expectations. The stock rose about 11 percent following the news.
The biggest development was a new 15-year lease with an AI lab for its Corsicana site. The deal is worth about $28 billion over its life and brings in roughly $1.8 billion in average annual rent. This is a major step in Riot's plan to use its power capacity for high-performance computing rather than just bitcoin mining. By locking in long-term rent from AI tenants, Riot is building a more stable business that does not rely entirely on the volatile price of bitcoin.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Riot ended its agreement with NYDIG Trust Company after moving its bitcoin to BitGo Bank & Trust. The switch happened automatically on October 29 once the transfer was finished. Riot did not pay any penalties for ending the contract early. This is a routine change in how the company stores its digital assets and does not affect its daily operations or mining capacity.
Source: 8-K filing
Riot Platforms is scheduled to report its latest quarterly results on Wednesday, November 4. Analysts are looking for revenue of about 160 million dollars as the company continues to shift from a pure Bitcoin miner to a provider of data center space for high-performance computing. This report will be an important check on how well Riot is managing its costs to mine Bitcoin and whether it is successfully signing up new non-mining tenants for its massive power capacity in Texas.
Riot is scheduled to report its third-quarter results on Thursday, October 29. Analysts are looking for revenue of about 160 million dollars, which would reflect the company's ongoing shift from just mining Bitcoin to also renting out data center space for high-performance computing. The update will be a key check on how well Riot is managing its costs after the recent Bitcoin halving, which cut the rewards for mining in half. We will also be looking for news on how much of its massive power capacity in Texas has been successfully leased to new non-mining tenants.
Management has missed its own profit targets for three straight quarters. The business is difficult to forecast because its results swing wildly based on the price of Bitcoin.
| Expectation | |
|---|---|
| EPS | $-0.30 |
| Revenue | $176M |
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