Bitcoin miner Riot Platforms revealed a net financial loss of $84.4 million during Q2 2024, registering its first quarterly loss since Q4 2022. The loss witnessed this quarter comes due to April’s Bitcoin halving event, cutting down mining rewards in half, and the Bitcoin network’s increased hash rate. Miners industry-wide had a hard time since the halving, registering losses and missing estimates.
Riot increased selling the bitcoin it received as rewards for mining to cover rising expenses, including general and administrative costs, amounting to $61.2 million. Its expenses rose to that amount from Q2 2023’s $41.4 million.
“The increase was primarily due to increases in stock compensation expenses of $32.1 million related to new grants under our long-term incentive program. Selling, general and administrative expenses were also impacted by a $3.8 million increase in advisory expenses related to ongoing M&A activity,” Riot said in a statement. It added, “Net loss for the quarter was $(84.4) million, or $(0.32) per share, compared to net loss of $(27.4) million, or $(0.16) per share, for the same period in 2023.”
Nevertheless, the miner’s bitcoin mining revenue spiked by 12% from the same time last year, owing to the asset’s price growing by almost 100% between June 30, 2023, and June 30, 2024. This comes despite Riot only receiving 844 bitcoin as rewards this quarter, a 52% decline caused by the halving. The Bitcoin network’s increased hash rate, alongside the reduced rewards, increased Riot’s cost to mine a bitcoin by 340%, going from $5,734 to $25,327.
Jason Les, Riot CEO, said, “Riot posted $70.0 million in revenue for the quarter and maintained strong gross margins in our core Bitcoin mining business. Riot also generated $13.9 million in power credits, inclusive of $4.4 million from participation in demand response programs, during the quarter, reducing our average energy cost and bringing our average direct cost to mine a Bitcoin to $25,327.”
Riot, once the second biggest Bitcoin miner by market cap, succumbed to rival CleanSpark, boasting a 47% growth in market cap and taking second place.