Riot Platforms, Inc.

Good day and thank you for standing by. Welcome to Riot Platform's third quarter 2024 earnings conference call. Please note that all participants have been placed in listen-only mode until the question and answer session begins following the company's presentation of its prepared remarks. Please also be advised that today's call is being recorded. I would now like to hand the conference call over to Phil McPherson, Vice President of Capital Markets and Investor Relations at Riot Platforms. Please go ahead.

Thank you, Liz. Good afternoon, and welcome to Riot Platform's third quarter 2024 earnings conference call. My name is Phil McPherson, Vice President of Capital Markets and Investor Relations, and joining me on today's call from Riot are Jason Less, CEO, Colin Yee, CFO, and Jason Chung, Executive Vice President and Head of Corporate Development and Strategies. the riot investor relations website you can find our third quarter 2024 earnings press release and accompanying earnings presentation which are intended to supplement today's prepared remarks and which include a discussion of certain non-gap items non-gap financial measures provided should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP and are included as additional clarifying items to aid investors in further understanding the company's third quarter performance. During today's call, we will make forward-looking statements regarding potential future events. These statements are based on management's current expectations and assumptions and are subject to risks and uncertainties. Actual results could materially differ due to factors discussed in today's earnings press release, in comments and responses made during today's call, and in the risk factors section of our Form 10-K and Form 10-Q, including for the quarter ended September 30, 2024, which will be filed later today, as well as other filings with the Securities and Exchange Commission. With that, I will turn the call over to Jason Less, CEO of Riot Platforms.

Thank you, Phil, and good afternoon, everyone. Riot's primary strategic focus has been on developing a leading vertically integrated Bitcoin mining company built on the three key pillars of developing and owning operations of significant scale, being a low-cost producer of Bitcoin, and building a balance sheet of strength. During the third quarter of 2024, we continue to demonstrate success at all three of these pillars. Riot increased total deployed hash rate quarter over quarter by 27%, from 22x a hash to 28x a hash, meeting our quarter end target of 28x a hash and on track to reach 35x a hash by the end of the year. The third quarter of 2024 was the first full operational quarter of Bitcoin production following the halving event, which occurred in late April, and which led to a reduction in the Bitcoin block subsidy from 6.25 to 3.125 Bitcoin per block. Additionally, global hash rate grew by 4% quarter over quarter. Both of these events created bearish headwinds for Bitcoin miners in relation to the cost to mine. Despite these events, Riot's cost to mine in the third quarter, aided by our unique power strategy, among the lowest cost miners in our industry and was significantly below the average price per Bitcoin during the quarter. We generated 12.4 million in power credits during the quarter, lowering our all-in cost of power to 3.1 cents per kilowatt hour during the third quarter, while also supporting the Texas grid during times of disruption in supply and demand. During the third quarter, Wright also continued to address challenges regarding our operational hash rate. While we are always focused on continued growth, our primary focus at this time is on improving this metric and reaching a standard of operational excellence. During the quarter, we completed the redeployment of a large portion of the underperforming miners at our Rothkell facility with a nameplate capacity of 3.33 exahash and the subsequent installation of latest generation miners with a nameplate capacity of 3.66 exahash from May through September. This focus on improving operational efficiency is already beginning to show results, and we are pleased to report that through October 29th, Bitcoin production for the month was approximately 469 Bitcoin. Average operating hash rate through this period was approximately 23 exahash. And when excluding the first two days of the month when our Corsicana facility was powered down for substation maintenance, average operating hash rate was approximately 24 exahash, representing an over 80% company-wide average utilization rate. These are just initial and preliminary results from our focus on achieving operational excellence, and we believe that with the initiatives underway across all of our sites, we are strongly positioned to continue building on this positive momentum. We remain focused on the growth and enhancement of our Bitcoin mining business. Riot's focus is maximizing Bitcoin mining results, and our strategy is enabling us to execute on this at an unprecedented scale.