Bitcoin Miner Riot Blockchain Posts Disappointing Quarterly Revenue

Bit­coin min­ing giant Riot Blockchain post­ed a net loss of $36.6 mil­lion. The Col­orado-based com­pa­ny gen­er­at­ed a rev­enue of $46.3 mil­lion – down by 28% from the pre­vi­ous­ly esti­mat­ed $54.2 million.

The ris­ing ener­gy costs have adverse­ly affect­ed many Bit­coin min­ers. How­ev­er, Riot’s CEO believes that the com­pa­ny was able to lever­age its long-term fixed-rate pow­er con­tract to gen­er­ate sig­nif­i­cant pow­er cred­its and reduce its oper­at­ing costs.

Revenue Misses Average Estimates

The widened loss and low rev­enue were attrib­uted to the low­er Bit­coin pro­duc­tion from sig­nif­i­cant cur­tail­ment activ­i­ties asso­ci­at­ed with the company’s pow­er strat­e­gy, as well as a draw­down in the mar­ket price of the cryp­to asset.

For the unini­ti­at­ed, Riot joined sev­er­al min­ers in cur­tail­ment process­es in Texas to vol­un­tar­i­ly shut off their machines to con­serve pow­er dur­ing times of peak demand. In exchange, Riot earned $13.1 mil­lion in pow­er cur­tail­ment cred­its for the third quar­ter, a major chunk of $9.5 mil­lion came in July alone. Due to this par­tic­i­pa­tion, the company’s bit­coin pro­duc­tion for that month plum­met­ed by 28%.

Riot man­aged to sell pow­er back to the Elec­tric Reli­a­bil­i­ty Coun­cil of Texas at a mar­ket-dri­ven spot price and rake in a profit.

As a result of the reduced cus­tomer billings due to cur­tail­ment, data cen­ter host­ing rev­enue, or fees col­lect­ed for offer­ing infra­struc­ture to oth­er firms’ machines, the company’s rev­enue dropped to $8.4 mil­lion for the third quar­ter as com­pared to $11.2 mil­lion for the same three-month peri­od last year.

North America’s Largest BTC Mining Facility

Sev­er­al min­ing com­pa­nies have been strug­gling under tepid mar­ket con­di­tions. While Riot’s min­ing mar­gins have tak­en a sig­nif­i­cant hit as well, its US Whin­stone facil­i­ty has emerged as the largest Bit­coin min­ing oper­a­tion in North America.

The Whin­stone facil­i­ty is under­go­ing an expan­sion project and will dou­ble the site’s Bit­coin min­ing capac­i­ty to 700 MW. Accord­ing to the update, the expan­sion of build­ings and crit­i­cal infra­struc­ture is expect­ed to be com­plet­ed in the sum­mer of 2022. Fol­low­ing the com­ple­tion, Riot claimed that the Whin­stone facil­i­ty could be the most sig­nif­i­cant Bit­coin min­ing facil­i­ty in the world, as mea­sured by devel­oped capacity.

“This expan­sion includes four new build­ings, total­ing approx­i­mate­ly 240,000 sq ft. and adding 400 MW of capac­i­ty. The build­ings and crit­i­cal infra­struc­ture for the expan­sion are expect­ed to be com­plet­ed in sum­mer 2022, with the final com­po­nents of the build­ing being com­plet­ed in par­al­lel with min­er shipments.”