Riot Blockchain, Inc. (NASDAQ: RIOT) (“Riot,” “Riot
Blockchain” or “the Company”), an industry leader in
Bitcoin (“BTC”) mining and hosting, announced today financial
highlights and financial results, for the full year ended December
31, 2021. The audited financial statements are available on Riot’s
website and here.
- Increased 2021 total revenue by
1,665% to $213.2 million, compared to $12.1 million in 2020.
- Reported a net loss of $7.9 million
in 2021, as compared to a net loss of $12.7 million in 2020. Net
loss for the fiscal year 2021 was significantly impacted by
non-cash stock-based compensation expense of $68.5 million and a
non-cash, unrealized loss of $36.5 million on impairment of
cryptocurrencies.
- Produced a Company record Adjusted
Non-GAAP EBITDA of $82.4 million in 2021, compared to $(6.3)
million in Non-GAAP Adjusted EBITDA in 2020. See attachment for
supplemental information of Non-U.S. GAAP Measures of Financial
Performance.
- Increased hashing capacity by 444%
to 3.1 EH/s as of December 31, 2021, compared to 0.57 EH/s as of
December 31, 2020.
- Increased Bitcoin held on balance
sheet by 353% to 4,884 BTC as of December 31, 2021, compared to
1,078 BTC as of December 31, 2020.
“We are pleased to report that 2021 was a record
financial year for the Company,” said Jason Les, CEO of Riot.
“2021 was also a transformative year, with the Company
emerging as a vertically-integrated industry leader in Bitcoin
mining. Riot is extremely well-positioned for the future with
demonstrated access to low-cost infrastructure, a world-class
digital infrastructure development team, highly-specialized
in-house engineering capabilities, industry-leading utilization of
cutting-edge immersion-cooling technology, increasing hash rate and
a strong balance sheet. As part of our strategy in 2022, the
Company will continue to leverage its industry-leading position and
focus on driving operational, technological and financial
improvements that are expected to deliver results for our
shareholders.”
Fiscal Year 2021 Operational
Highlights
- Invested in 82,500 Bitmain S19, S19
Pro, S19j Pro, and S19XP Antminers which, when fully installed by
January 2023, are expected to achieve an estimated aggregate
Bitcoin mining hash rate capacity of 12.8 EH/s.
- Increased deployed hash rate
capacity to 3.1 EH/s, a 444% increase from 0.6 EH/s as of December
31, 2020.
- Acquired Whinstone in May 2021,
North America’s largest Bitcoin mining facility, and commenced an
immediate expansion to 700 MW.
- Announced the Bitcoin mining
industry’s first industrial-scale immersion-cooled Bitcoin mining
operation in October 2021.
- Acquired ESS Metron, a premier
provider of highly-engineered electrical equipment solutions, in
December 2021, significantly enhancing the Company’s position as a
vertically-integrated industry leader in Bitcoin mining.
Fiscal Year 2021 Financial
Results
Total mining revenue in 2021 was $184.4 million,
as compared to $12.0 million in 2020, an increase of 1,439%
year-over-year.
Mining revenue in excess of mining cost of
revenues (excluding depreciation and amortization), was $138.9
million (75% of total mining revenue), as compared to $5.7 million
(48% of total mining revenue) in 2020. The increases in revenue and
gross profit were due to the increase in the Company’s hash rate in
addition to an increase in the price of Bitcoin during 2021, offset
by the increase in the global network hash rate in 2021.
Selling, general, and administrative (SG&A)
expenses in 2021 increased to $87.4 million from $10.3 million in
2020, an increase of 753% year-over-year. The increase in SG&A
was primarily due to an increase in non-cash stock-based
compensation, stemming from the introduction of the Company’s
performance stock incentive plan. SG&A expenses, not including
stock-based compensation, increased to $18.9 million in 2021 from
$6.8 million in 2020, an increase of 178% year-over-year. Taking
into account the 1,439% year-over-year increase in the Company’s
mining revenue, the Company’s operating leverage significantly
increased in 2021.
Net loss for 2021 was $(7.9) million, or $(0.08)
per share, compared to a net loss of $(12.7) million, or $(0.30)
per share in 2020. The net loss in 2021 included non-cash
stock-based compensation of $68.5 million, depreciation and
amortization of $26.3 million, and non-recurring
acquisition-related costs of $21.2 million.
At December 31, 2021, the Company had $471.9
million in cash and cryptocurrencies, as compared to $235.0 million
at December 31, 2020.
2022 Strategic Priorities
- Successfully complete the ongoing
expansion of Whinstone.
- Successfully execute on deployment
of disclosed miner purchase orders of 82,500 Bitmain S19 generation
Antminers.
- Monitor additional opportunities
for miner procurement and hash rate growth.
- Evaluate additional technological
initiatives to increase mining efficiencies.
About Riot Blockchain, Inc.
Riot Blockchain (NASDAQ: RIOT) focuses on mining
Bitcoin, and through Whinstone, its subsidiary, hosting 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. Through Riot’s subsidiary ESS Metron, the
Company engineers and manufacturers electrical equipment solutions
for Bitcoin mining and other industries. The Company’s headquarters
is in Castle Rock, Colorado, and the Whinstone Facility operates in
Rockdale, Texas. Riot 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
Statements in this press release that are not
historical facts are forward-looking statements that reflect
management’s current expectations, assumptions, and estimates of
future performance and economic conditions. Such statements are
made in reliance on the safe harbor provisions of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. 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 may include,
but are not limited to, statements about the benefits of
acquisitions, including financial and operating results, and the
Company’s plans, objectives, expectations, and
intentions. Among the risks and uncertainties that could cause
actual results to differ from those expressed in forward-looking
statements include, but are not limited to: unaudited estimates of
Bitcoin production; our future hash rate growth (EH/s); our
expected schedule of new miner deliveries; our ability to
successfully deploy new miners; MW capacity under
development; we may not be able to realize the anticipated
benefits from immersion-cooling; the integration of acquired
businesses may not be successful, or such integration may take
longer or be more difficult, time-consuming or costly to accomplish
than anticipated; failure to otherwise realize anticipated
efficiencies and strategic and financial benefits from our
acquisitions; and the impact of COVID-19 on us, our customers, or
on our suppliers in connection with our estimated
timelines.
Detailed information regarding other factors
that may cause actual results to differ materially from those
expressed or implied by statements in this press release may be
found in the Company’s filings with the U.S. Securities and
Exchange Commission (the “SEC”), including 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, 2021, and our other filings with the
SEC, copies of which may be obtained from the SEC’s website
at www.sec.gov. All forward-looking statements included
in this press release are made only as of the date of this press
release, and the Company disclaims any intention or obligation to
update or revise any forward-looking statements to reflect events
or circumstances that subsequently occur, or of which the Company
hereafter becomes aware, except as required by law. Persons reading
this press release are cautioned not to rely on forward-looking
statements.
For further information, please
contact:
Investor Contact:Phil
McPhersonIR@RiotBlockchain.com303-794-2000 ext. 110
Media Contact:Trystine Payfer303-794-2000 ext.
118PR@RiotBlockchain.com
SOURCE: Riot Blockchain, Inc.
Non-U.S. GAAP Measures of Financial
Performance
In addition to consolidated U.S. GAAP financial
measures, Riot reviews the non-GAAP financial measure, “Adjusted
EBITDA.” Adjusted EBITDA is a financial measure defined as our
EBITDA, adjusted to eliminate the effects of certain non-cash and /
or non-recurring items, that do not reflect our ongoing strategic
business operations. EBITDA is computed as net income before
interest, taxes, depreciation, and amortization. Adjusted EBITDA is
EBITDA further adjusted, for certain income and expenses,
management believes results in a performance measurement that
represents a key indicator of the Company’s core business
operations of Bitcoin mining. The adjustments include fair value
adjustments such as derivative power contract adjustments, equity
securities value changes, and non-cash stock-based compensation
expense, in addition to financing and legacy business income and
expense items. During Q1 – 2022 we determined to exclude
impairments and gains or losses on sales or exchanges of
cryptocurrencies from our calculation of Adjusted Non-GAAP EBITDA
for all periods presented. The effect of this change removed, from
the Adjusted Non-GAAP EBITDA results, impairments of
cryptocurrencies of $36,462 and $989 in 2021 and 2020 respectively
and realized gains on the sale / exchange of cryptocurrencies of
$(253) and $(5,184) in 2021 and 2020 respectively.
We believe Adjusted EBITDA can be an important
financial measure because it allows management, investors, and our
board of directors to evaluate and compare our operating results,
including our return on capital and operating efficiencies,
from period-to-period by making such adjustments.
Adjusted EBITDA is provided in addition to, and
should not be considered to be a substitute for, or superior to,
the comparable measure under U.S. GAAP. Further, Adjusted
EBITDA should not be considered as alternatives to revenue growth,
net income, diluted earnings per share or any other performance
measure derived in accordance with U.S. GAAP, or as alternatives to
cash flow from operating activities as a measure of our liquidity.
Adjusted EBITDA has limitations as analytical tools, and you should
not consider such measures either in isolation or as substitutes
for analyzing Riot’s results as reported under U.S. GAAP.
Reconciliations of Adjusted EBITDA to the most
comparable U.S. GAAP financial metric for historical periods are
presented in the table below.
Riot Blockchain, Inc. and
Subsidiaries
Reconciliation of GAAP and Non-GAAP
Financial Information
(Unaudited; in thousands)
|
|
|
For the Years Ended December 31, |
|
|
|
|
2021 |
|
|
|
2020 |
|
Net income
(loss) |
|
$ |
(7,926 |
) |
|
$ |
(12,667 |
) |
|
Interest (income) expense |
|
|
296 |
|
|
|
(85 |
) |
|
Income tax expense
(benefit) |
|
|
254 |
|
|
|
- |
|
|
Depreciation and
amortization |
|
|
26,324 |
|
|
|
4,494 |
|
EBITDA |
|
$ |
18,948 |
|
|
$ |
(8,258 |
) |
Non-cash/non-recurring operating expenses: |
|
|
|
|
|
Stock-based compensation
expense |
|
|
68,491 |
|
|
|
3,407 |
|
|
Acquisition-related costs |
|
|
21,198 |
|
|
|
- |
|
|
Change in fair value of
derivative asset (gain) loss |
|
|
(12,112 |
) |
|
|
- |
|
|
Change in fair value of
contingent consideration (gain) loss |
|
|
975 |
|
|
|
- |
|
|
Realized (gain) on
sale/exchange of long-term investment |
|
|
(26,260 |
) |
|
|
- |
|
|
Unrealized loss (gain) on
marketable equity securities |
|
|
13,655 |
|
|
|
- |
|
|
Reversal of registration
rights penalty |
|
|
- |
|
|
|
(1,358 |
) |
|
(Gain) on sale of
equipment |
|
|
- |
|
|
|
(29 |
) |
|
Other (income) expense |
|
|
(2,378 |
) |
|
|
6 |
|
Other revenue,
(income) expense items: |
|
|
|
|
|
License fees |
|
|
(97 |
) |
|
|
(97 |
) |
Adjusted
EBITDA |
|
$ |
82,420 |
|
|
$ |
(6,329 |
) |
|
|
|
|
|
|
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