Mining is Still Profitable: RIOT Records Revenue Margin $38.9 Million in Q1 of 2022

Key Takeaways

  • RIOT announced first quarter Financial Results on May 10th. The miner recorded revenue of $79.8 million.
  • The company noted that the consistent mining revenue margin was due to the operating efficiencies of new generation miners at Riot’s Whinstone US, Inc. facility.
  • The company expects the total self-mining Hash Rate Capacity to reach nearly 12.8 EH/s by January.

Leading Bitcoin Miner, Riot Blockchain (RIOT), announced its First Quarter Financial Results on May 10 and recorded revenue of $79.8 million. However, the mining company did miss the analyst revenue estimates of $83.7 million.

Despite missing the analyst estimate, RIOT managed to increase its mining revenue by 150% to a record $57.9 million for the three-month period ended March 31, 2022, as compared to $23.2 million for the same period last year. The mining giant reiterated that by January, it expects the total self-mining hash rate capacity to reach nearly 12.8 EH/s.One of RIOT’s main competition Bit Digital also owned 27,644 Bitcoin miners and 731 Ethereum miners with an estimated maximum total hash rate of 1.6 EH/s and 0.3 TH/s, respectively in its quarter ended on March 31.

The miner noted that the mining revenue margin was $38.9 million (67 percent of mining revenue), compared with $15.6 million (68 percent of mining revenue) for the same time frame last year. According to the statement, RIOT’S mining revenue margin remained consistent on a year-over-year basis despite a 12% lower price of Bitcoin during the first quarter of 2022 compared to the first quarter of 2021. Cipher Digital, another bitcoin miner also announced its first quarter financial results recently. Cipher’s weighted average power price is 2.73 c/kWh and anticipated weighted average cost for mining rigs is also expected to be $45.01 per TH/s.

RIOT stated that despite the decrease in the price of BTC, the consistent mining revenue margin was mainly owing to the operating efficiencies driven by a greater number of new generation miners currently being deployed at Riot’s Whinstone US, Inc. facility. According to the company, taking into account the year-over-year $23.3 million increase in quarterly mining revenue margin relative to the year-over-year $5.4 million increase in SG&A expenses, RIOT continues to demonstrate positive operating leverage and the benefits of its growing economies of scale. 

The company also believes that upon full deployment of all currently contracted miners, its total self-mining fleet would consume nearly 370 MW of energy. Riot, in addition to it’s self-mining operations, also hosts approximately 200 MW of institutional Bitcoin mining clients. The company’s net income for the quarter was $35.6 million, or 30 cents per share, compared to a net income of $7.5 million, or 9 cents per share last year. RIOT’s shares were also up 1.6% in post-market trading.

Jason Les, CEO of Riot, commenting on the recent development, said, “Our vertically integrated business strategy of owning, operating, and manufacturing has accelerated our growth while helping insulate us from continuing global supply chain issues. “ We look forward to demonstrating continued operational excellence, execution in increasing our hash rate, and leading our industry in increasing the Company’s developed capacity,” added Jason. 

The Colorado-headquartered Riot Blockchain mainly focuses on mining Bitcoin, and through Whinstone, its subsidiary also hosts Bitcoin mining equipment for institutional clients.The Current Bitcoin TH/s is 221.74m and the Current Network difficulty is 29.823t. The total USD value of all transaction fees paid to miners currently is 547.207k

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Saniya Raahath