Street Calls of the Week
Introduction & Market Context
Riot Platforms, Inc. (NASDAQ:RIOT) released its first quarter 2025 financial results on May 1, showing significant revenue growth but a substantial net loss as the company continues its strategic shift toward AI and high-performance computing (HPC) data center development. The Bitcoin mining company’s stock closed at $7.75, up 7.04% for the day, but dipped slightly in after-hours trading.
The company’s presentation highlighted a 104% year-over-year revenue increase to $161.4 million, while reporting a net loss of $296.4 million ($0.90 per share), a significant reversal from the $109.4 million net income reported in the previous quarter. This mixed performance comes as Riot balances its core Bitcoin mining operations with ambitious expansion into the AI data center market.
Quarterly Performance Highlights
Riot’s Q1 2025 financial results showed strong top-line growth but challenging bottom-line performance. The company produced 1,530 Bitcoin during the quarter (approximately 17 BTC per day), representing a modest 1% increase from Q4 2024 despite a 10% increase in the global network hash rate.
As shown in the following snapshot of key metrics, Riot held 19,223 Bitcoin valued at approximately $1.59 billion at quarter-end, representing a 47.4 BTC per million fully diluted shares:
Revenue increased dramatically year-over-year, with Bitcoin mining revenue growing from $71.4 million in Q1 2024 to $142.9 million in Q1 2025. The company maintained a relatively stable gross margin of 46%, compared to 47% in the same period last year. However, adjusted EBITDA declined to $(176.3) million, reflecting increased operational costs and investments.
The following chart illustrates Riot’s revenue growth and gross margin performance:
Riot’s Bitcoin mining operations achieved over 88% uptime during the quarter, with a net cost of power at 3.4 cents per kilowatt-hour, which the company describes as "one of the lowest in the industry." The company also earned $7.8 million in power curtailment credits through its power management strategy.
The cost to mine each Bitcoin increased to $43,808 in Q1 2025 compared to $23,034 in Q1 2024, primarily due to the increased global network difficulty. However, Riot highlighted that non-power direct costs per Bitcoin decreased 3% quarter-over-quarter, from $8,730 to $8,495, as shown in this breakdown:
Strategic Initiatives
A significant development during Q1 was Riot’s acquisition of Rhodium’s mining operations, which provided access to 125 MW of power capacity at the Rockdale Facility. The $185 million transaction included $129.9 million in cash, $6.1 million in returned security deposits, and $49 million in Riot shares. This acquisition marks Riot’s exit from the hosting business, which had resulted in approximately $14.6 million in losses during fiscal year 2024.
Riot’s capital expenditure plans for 2025 total $204.7 million, with $48.9 million already spent in Q1 and $155.8 million forecasted for the remainder of the year. These investments are primarily focused on expanding the Corsicana facility and purchasing miners for the Kentucky facility, as detailed in this capital expenditure breakdown:
The company projects its hash rate to grow from 33.7 EH/s at the end of Q1 2025 to 38.4 EH/s by the end of the year, representing a 22% annual growth rate. This expansion is expected to maintain Riot’s approximately 4% share of the global Bitcoin network hash rate:
Perhaps the most strategic initiative highlighted in the presentation is Riot’s aggressive push into AI and HPC data center development at its Corsicana facility. The company has secured 1 GW of power capacity, with 400 MW currently operational and a 600 MW substation expansion planned for completion in 2026. Riot owns 265 acres of land at the site, with an additional 355 acres closing in May 2025.
The following slide details the feasibility study results for the Corsicana data center development:
Riot is actively developing the site to attract potential AI and cloud computing tenants, emphasizing its proximity to Dallas (a Tier-1 data center market), dark fiber connectivity, and favorable zoning and tax treatment. The company has completed several initial steps, including engaging consultants and financial advisors, and is now focused on infrastructure development and securing lease agreements with tenants.
Forward-Looking Statements
For the remainder of 2025, Riot outlined four key focus areas: operational efficiency, maintaining low power costs, achieving accretive Bitcoin yield, and advancing its data center development process. The company emphasized its track record of achieving high operational uptime (>88% in Q1) and implementing effective power management strategies.
Riot’s push into AI and cloud computing is supported by industry trends showing massive demand growth. The company cited projections of significant increases in data center power demand and worldwide data consumption, along with quotes from tech industry leaders about multi-billion dollar AI infrastructure investments:
Conclusion
Riot Platforms’ Q1 2025 presentation reveals a company in transition, balancing its established Bitcoin mining operations with ambitious plans to capitalize on the growing AI and HPC data center market. While revenue growth remains strong, the significant net loss highlights the challenges of this strategic pivot and the substantial investments required.
The company’s dual focus on optimizing its Bitcoin mining efficiency while developing AI data center capabilities positions it at the intersection of two high-growth technology sectors. However, investors will likely be watching closely to see if Riot can reverse its negative EBITDA trend and translate its strategic initiatives into improved bottom-line performance in future quarters.
Full presentation:
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