Riot's Bitcoin Production Plummets Amidst Soaring Mining Costs

Cryptocurrency mining company Riot Platforms (RIOT) reported a decline in Bitcoin (BTC) production in 2024, as the cost of mining the digital asset surged. The Colorado-based company's revenue for the year totaled $376.7 million, up 34% from $280.7 million in 2023, driven largely by a $132 million increase in its Bitcoin mining revenue. However, Riot Platforms produced only 4,828 Bitcoin in 2024, down 27% from 6,626 BTC mined in the same period in 2023.

The company attributed the decline in Bitcoin production to soaring mining costs, which rose to $32,216 per Bitcoin in 2024 from $3,831 in the previous year. Riot Platforms cited rising power expenses and the impacts of a halving event in April 2024, which reduced the available supply of Bitcoin by 50%, as factors contributing to the increased costs. Engineering revenue last year totaled $38.5 million, down 40% from $64.3 million a year earlier, due to a manufacturing contract for a government client that took longer than anticipated.

Despite the challenges, Riot Platforms maintained an "industry-leading financial position," with $439.1 million in working capital, including $277.9 million of cash on hand at year-end 2024. The company held 17,722 Bitcoin, worth approximately $1.65 billion as of Dec. 31, 2024. However, RIOT stock has declined 43% over the last 12 months.

Prior to the earnings report, the stock of Riot Platforms had a consensus Strong Buy rating among eight Wall Street analysts, based on seven Buy and one Hold recommendations assigned in the last three months. The average RIOT price target of $18.57 implied 85.89% upside from current levels. These ratings may change following the latest financial results.