Riot Platforms’ Q1 Revenue Growth Increases as Share Price Drops.

Riot Platforms, a US-based Bitcoin mining company, has reported impressive financial performance in the first quarter of 2024. The company reported total revenue of $79.3 million, up from $73.2 million in the same period last year.

Riot also reported net income of $211.8 million, 0.82 per share, and $245.7 million in adjusted EBITDA — a new high for the company's quarterly financial performance. A 131% increase in the price of Bitcoin compared to the same three-month period in 2023 contributed significantly to this increase.

Bitcoin Price Increase Drives Record-Breaking Quarter for Riot Platforms

Riot's report revealed that it received $5.1 million in energy reduction credits. The number is higher than last year's 3.1 million dollars, which shows the effective management of operational efficiency.

The Bitcoin mining division alone brought in $74.6 million. The number is significantly higher than last year's $48.0 million, due to the favorable Bitcoin pricing environment. In contrast, the engineering department declined, generating $4.7 million compared to last year's $16.1 million.

Riot maintains a strong financial position with a working capital of $692.5 million. As of March 31, 2024, it reported $688.5 million in cash and 8,490 outstanding bitcoins with an estimated value of $605.6 million.

In addition, the Corsicana facility's distribution capacity was a significant growth during the quarter. The facility is slated to be the world's largest bitcoin mining facility when fully built.

In addition to the Corsicana facility, Riot expects to increase its own mining hash rate capacity, which it previously purchased from MicroBit in June 2023. Deployment of these miners has begun and is expected to be completed by the second half of 2025.

“We are on track to increase our own mining hash rate capacity to 31 EH/s by the end of the year, which will triple our current hash rate capacity. When fully developed, the Corsicana facility, which will have a total capacity of up to 1 GW… will provide us with a strong foundation to grow our Bitcoin mining operations in the future,” Riot Platform said. CEO Jason Les said.

Read more: 5 Best Bitcoin Mining Stocks to Buy

However, Riot has experienced a decline in its Bitcoin output. Riot mined 1,364 bitcoins in the first quarter, a 36 percent decrease from the 2,115 bitcoins mined in Q1 2023.

The decline in production can be attributed to the ever-increasing difficulty of the Bitcoin network, which has more than doubled since January 2023.

In addition, the average cost of mining a single bitcoin rose to $23,034, a significant increase from last year's $9,438. This increase represents an 89 percent increase in the global network's hash rate over the same period. At the same time, it also presents growing operational challenges in the mining industry.

Indeed, the mining sector is still full of challenges. The ever-increasing cost of electricity and the looming decline in Bitcoin supply could squeeze operating margins. Charles Edwards, founder of Capriole Fund, shares his opinion on the current price of Bitcoin.

“This means 1 of 3 things will happen now: 1. Prices increase, 2. ~15% of drillers shut down, 3. Transaction fees are much higher on average,” Edwards wrote, “expecting a little of all three.”

In response to the recent outlook, analysts note that some miners may upgrade their business to new technologies such as artificial intelligence (AI). Analysts see this change as a strategic move to address the risks of the volatile crypto market by leveraging their computing power beyond crypto mining.

However, a survey conducted by CoinShares in January 2024 indicated that miners with high bitcoin reserves and strong capitalization are better placed in higher markets. In contrast, those with limited cash reserves and high operating costs face higher risks with Bitcoin.

Riot's strong performance in Q1 has yet to positively impact the company's stock price. The stock price has decreased by 11.77% in the last five days.

Read more: Best Crypto Mining Stocks to Buy or Watch Now

The broader timeframe presents a similar picture, with RIOT down 36.28% from its year-to-date high of $17.62. At the time of writing, the price of RIOT is $9.82 during afternoon trading.