Riot Blockchain Reports Record Second Quarter 2021 Financial Results, Current Operational and Financial Highlights
August 23 2021 - 4:30PM
Riot Blockchain, Inc. (NASDAQ: RIOT)
("Riot" or the
"Company"), one of the leading Nasdaq-listed public Bitcoin
(“BTC”) mining companies in the United States, reported financial
results as of and for the three-months ended June 30, 2021. The
unaudited financial statements are available on Riot's website and
here.
- Increased mining revenue by 1,540% to a record $31.5 million
for the three-month period ended June 30, 2021, as compared to $1.9
million for the same three-month period in 2020.
- Increased mining revenue margin to 70% for the three-month
period ended June 30, 2021, as compared to 25% for the same
three-month period in 2020.
- Produced record net income of $19.3 million, or $0.22 per share
for the three-month period ended June 30, 2021, as compared to a
$(10.6) million net loss, or $(0.31) per share, for the same
three-month period in 2020.
- Total cash and Bitcoin of $195.4 million as of June 30,
2021.
“We are extremely pleased with Riot’s record quarterly financial
results,” said Jason Les, Riot’s CEO. “The Company’s improved
financial results are a direct result of Riot’s absolute focus on
Bitcoin mining and growing its mining operations. With the
successful acquisition of Whinstone US (“Whinstone”), the Company’s
growth prospects have been significantly de-risked, and future
financial opportunities are very exciting. As previously announced,
Riot is aggressively expanding its capacity at Whinstone, which is
expected to provide the critical infrastructure necessary to
successfully execute on driving continued growth for the
Company.”
Second Quarter 2021 and Recent Financial Highlights
Riot continues to attain significant milestones and set up for
future opportunities, driven by its focus on Bitcoin mining.
- Produced a Company record $19.3 million in net income for the
three-month period ended June 30, 2021, as compared to a $(10.6)
million net loss for the same three-month period in 2020.
- Increased mining revenues by 1,540%, to $31.5 million for the
three-month period ended June 30, 2021, as compared to $1.9 million
for the same three-month period in 2020.
- Increased mining revenue margin, excluding depreciation and
amortization, to 70% for the three-month period ended June 30,
2021, as compared to 25% for the same three-month period in
2020.
- Increased total mined BTC by 38% on a sequential
quarter-over-quarter basis, with 675 BTC mined in the second
quarter of 2021, as compared to 491 BTC mined in the first quarter
of 2021.
- Increased total revenues to $34.3 million for the three-month
period ended June 30, 2021, as compared to $1.9 million for the
same three-month period in 2020. Included in the consolidated
results are the operations of Whinstone, including $2.9 million in
revenue, for the approximate one-month post acquisition period.
With the acquisition of Whinstone, the Company determined it has
two reportable segments: Cryptocurrency Mining and Data Center
Hosting.
- Substantially all of the current assets as of June 30, 2021,
totalling $221.3 million, are highly liquid. As of July 31,
2021, the Company’s unaudited BTC balance stood at 2,687 BTC, all
of which were produced by its mining operations.
- The average BTC price used to calculate Riot’s second quarter
2021 mining revenues was approximately $46,600.
Second Quarter 2021 and Recent Operational Highlights
- Successfully closed the acquisition of Whinstone, creating one
of the largest hosting and mining companies in North America, as
measured by developed and future capacity.
- Initiated a 400 megawatt (“MW”) expansion at Whinstone with
four buildings totalling approximately 240,000 square feet
currently under construction.
- Strengthened the Company’s management team by appointing
William Jackman as General Counsel, Josh Bowman as Director of
Human Resources, and Trystine Payfer as Director of
Communications.
- During the three-month period ended June 30, 2021, Riot
received 9,900 S19 Pro Antminers (110 TH) under purchase contracts
with Bitmain previously announced in 2020. As of June 30, 2021, the
Company had 16,146 miners installed, and 7,500 S19 Pro Antminers in
the process of being deployed.
- Subsequent to June 30, 2021, the Company installed
approximately 4,600 S19 Pro Antminers, resulting in a fleet of
20,746 miners deployed. Riot’s current hash rate capacity is
approximately 2.07 exahash per second (“EH/s”).
- As part of a December 2020 purchase order with Bitmain, 2,000
S19 Pro Antminers were shipped late July and will be deployed at
the Whinstone facility over the coming weeks. By early September,
Riot anticipates that it will have a total of 25,946 Antminers in
operation, utilizing approximately 83 MW of energy, with an
estimated hash rate capacity of 2.6 EH/s.
Second Quarter 2021 Financial Results
Mining margin, computed as mining revenues in excess of cost of
revenues (excluding depreciation and amortization which is
separately stated), was $22.1 million (70% of mining revenue),
which compares to $0.5 million for the same three-month period in
2020. The improvements in revenue and gross profit were
primarily due to increases in the price of Bitcoin, combined with
the greater number and higher efficiencies of the new generation
miners currently being deployed, net of increases in the difficulty
index associated with solving BTC mining algorithms.
Selling, general, and administrative ("SG&A") expenses
increased by 58% to $3.5 million, as compared to $2.2 million for
the same three-month period in 2020. The increase in SG&A
expenses was primarily due to increased personnel as a result of
the company’s rapid growth. Acquisition-related costs of
$17.0 million were incurred during the second quarter of 2021, for
the Whinstone acquisition. Acquisition-related costs incurred
during the period are considered to be non-recurring.
Net income for the quarter ended June 30, 2021 was $19.3
million, or $0.22 per share, as compared to a net loss of $(10.6)
million, or $(0.31) per share, in the same period last year.
Second quarter 2021 net income, included several significant income
(expense) items, including a realized gain on the sale of long-term
investments of $26.2 million, an impairment of crypto currencies of
$(17.5 million), a change in fair value of derivative assets of
$17.5 million, associated with the Whinstone power agreement, and
Whinstone acquisition costs of $(17.0) million.
Hash Rate Growth
During Q4 2022, Riot anticipates achieving a total hash rate
capacity of 7.7 EH/s, assuming full deployment of its anticipated
fleet of approximately 81,146 Antminers acquired from Bitmain, 95%
of which will be the latest generation S19 series model of
miners. When fully deployed, the Company’s total fleet is
expected to consume approximately 257.6 MW of energy with an
overall hash rate efficiency of 33 joules per terahash (J/TH). This
demonstrates Riot’s commitment to being a market leader by building
one of the largest and most efficient Bitcoin mining fleets in the
industry.
About Riot Blockchain, Inc.
Riot Blockchain (NASDAQ: RIOT) focuses on mining Bitcoin, and
through Whinstone, its wholly owned subsidiary, provides data
center hosting of Bitcoin mining equipment for institutional
clients. The Company is expanding and upgrading its mining
operations through industrial-scale infrastructure development and
latest-generation miner procurement. Riot is headquartered in
Castle Rock, Colorado, and the Whinstone facility operates out of
Rockdale, Texas. The Company also has mining equipment operating in
upstate New York under a co-location hosting agreement with
Coinmint, LLC. For more information,
visit www.RiotBlockchain.com.
Safe Harbor
The information provided in this press release may include
forward-looking statements relating to future events or the future
financial performance of the Company. Because such statements are
subject to risks and uncertainties, actual results may differ
materially from those expressed or implied by such forward-looking
statements. Words such as "anticipates," “believes,” "plans,"
"expects," "intends," "will," "potential," "hope" and similar
expressions are intended to identify forward-looking statements.
These forward-looking statements are based upon current
expectations of the Company and involve assumptions that may never
materialize or may prove to be incorrect. Actual results and the
timing of events could differ materially from those anticipated in
such forward-looking statements as a result of various risks and
uncertainties. Detailed information regarding factors that may
cause actual results to differ materially from the results
expressed or implied by statements in this press release relating
to the Company may be found in the Company's periodic filings with
the U.S. Securities and Exchange Commission (the “SEC”), including
the factors described in the sections entitled "Risk Factors" and
“Cautionary Note Regarding Forward-Looking Statements” of the
Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2020, which was filed with the SEC on March 31, 2021,
copies of which may be obtained from the SEC's website at
www.sec.gov. The Company does not undertake any obligation to
update forward-looking statements contained in this press
release.
Phil McPherson
Riot Blockchain, Inc.
303-794-2000 ext. 110
IR@riotblockchain.com
Trystine Payfer
Riot Blockchain, Inc.
303-794-2000
PR@riotblockchain.com
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