Riot Platforms Reports $84.4 Million Loss in Q2 Due to Rising Costs

Riot Platforms Reports Significant Loss in Second Quarter

Riot Platforms (RIOT), a prominent Bitcoin (BTC) mining firm based in Castle Rock, Colorado, announced that its losses for the second quarter have increased threefold compared to the previous year, primarily due to a 48% rise in overall operational costs. The company reported a net loss of $84.4 million, translating to $0.32 per share.

The substantial increase in expenses is largely attributed to selling, general, and administrative costs, which surged to $61.2 million. Notably, over half of this figure, approximately $32.1 million, was related to stock compensation expenses linked to new grants issued as part of a long-term incentive program. Furthermore, the net loss for the quarter included a significant $76.4 million decline in the fair value of the Bitcoin holdings.

The recent Bitcoin halving event in April, which effectively halves the rewards miners receive for adding new blocks to the blockchain, contributed to a decrease in the amount of Bitcoin mined by Riot during the quarter. The company successfully mined 844 BTC, which represents a 52% drop compared to the same period last year.

Moreover, the cost associated with mining each Bitcoin has escalated dramatically, rising to $25,327 from $5,734. This surge in costs is largely a result of a 68% increase in the network’s hashrate, which measures the total computational power dedicated to processing transactions on the Bitcoin network. A higher hashrate necessitates that miners allocate more energy and resources, thus driving up the costs to produce each Bitcoin.

As a result of these developments, RIOT shares experienced a slight decline of 0.3% in pre-market trading as of 09:35 UTC on Thursday. In the broader cryptocurrency market, Bitcoin has seen a 2.7% decrease in value over the past 24 hours, while the CoinDesk 20 Index (CD20), which gauges the performance of a wider range of cryptocurrencies, has fallen by 4.5%.