Riot Platforms Reports Record Earnings Amidst Crypto Market Decline
Riot Platforms reported record earnings with $376.7 million in revenue for 2024, driven mainly by bitcoin mining. However, its stock fell 9% amid a declining bitcoin market, which reached $87,000. The company aims to diversify into AI and high-performance computing, anticipating stronger long-term cash flows. Overall, Riot’s results indicate a trend favoring well-capitalized miners in the crypto landscape.
On February 24, 2024, Riot Platforms reported strong financial earnings for both the fourth quarter and the full fiscal year, with revenue reaching $376.7 million, a 34% increase from the previous year. This positive performance was primarily driven by substantial revenue from bitcoin mining, contributing $132 million to the total. Despite surpassing expectations, Riot’s stock experienced a decline, falling 9%, mirroring the broader downturn in the cryptocurrency market, particularly with bitcoin’s price dropping to $87,000, its lowest since November.
The company’s net income surged to $109.4 million in 2024, in contrast to a net loss of $49.4 million in 2023. The earnings per share for the fourth quarter stood at $0.43, significantly exceeding Zacks’ consensus estimate predicting a loss of $0.27. This represents a marked recovery from a loss per share of $0.54 recorded in Q3. Riot’s performance is notably relevant given the anticipated bitcoin network ‘halving’ event in April 2024 and an impressive 67% increase in the global hash rate throughout the year.
In fiscal year 2024, Riot’s bitcoin holdings increased by 141% compared to the end of 2023, totaling 17,722 bitcoins by December 31, 2024, and reaching 18,221 by January 2025. This positions Riot as the third-largest public company by bitcoin holdings, following Strategy and MARA Holdings. CEO Jason Les emphasized the importance of maintaining a robust balance sheet, which facilitated growth and strategic asset management since 2018.
However, the total bitcoin mined decreased by 27%, with 4,828 bitcoins produced in 2024, compared to 6,626 in 2023. This decline is attributed to soaring mining costs averaging $32,216 per bitcoin, a significant increase from $3,831 in 2023, driven chiefly by heightened network difficulty and energy costs. Kevin Rusher, a founder of RAAC, underscored that efficient management of electricity and hardware costs is critical for mining profitability.
Looking forward, Riot plans to expand into the AI and high-power computing sectors at its Corsicana Facility in 2025. Les noted that market recognition of AI/HPC value has led to improved valuations for companies making this transition. This diversification could distinguish Riot from competitors focused solely on bitcoin mining, offering more consistent cash flows through AI contracts.
Rachel Lin, co-founder and CEO of SynFutures, remarked that Riot’s initiatives in AI and high-performance computing indicate a proactive strategy that could set industry standards. Expert opinions converge on the notion that Riot’s favorable financial results may foretell trends for other larger mining operations. The resilience of well-capitalized miners amid bitcoin price volatility suggests a consolidation in the industry, while smaller firms may face challenges, particularly during the upcoming halving.
In summary, Riot Platforms delivered exceptional earnings amidst an overall decline in the cryptocurrency market. Despite reporting record revenues, the company’s stock suffered a decline due to broader market trends. With plans to diversify into AI and high-performance computing, Riot aims to position itself advantageously in a shifting industry landscape. The results indicate a strengthening of larger, well-capitalized miners, potentially reshaping market dynamics.
Original Source: sherwood.news
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