Bitcoin miner and AI data center developer Riot Platforms (NASDAQ: $RIOT) reported third-quarter revenue of $181.4 million on Wednesday, topping analyst estimates, as growth in its data center and engineering businesses offset a sharp decline in bitcoin mining revenue.

The company also announced the largest lease in its history, a 15-year agreement with an artificial intelligence lab covering its entire Corsicana campus in Texas, valued at approximately $28 billion. The deal brings Riot's contracted data center revenue to roughly $38 billion, even as its mining business faces pressure from lower bitcoin prices.

According to the company's press release, revenue edged up 1% from $180.2 million a year earlier. Mining revenue fell 28% to $116.0 million as the average value of bitcoin mined declined to $70,855 from $114,361, partially offset by a 16% increase in production to 1,637 bitcoin.

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Data center revenue totaled $18.4 million, reflecting the first full quarter of 25 megawatts of capacity delivered to AMD (NASDAQ: $AMD). Engineering revenue climbed to $47.0 million from $19.1 million, driven by demand for custom electrical equipment. Net income, however, dropped to $4.0 million from $104.5 million a year earlier.

Bitcoin mining costs decline, but remain above realized prices

Riot's cost to mine one bitcoin, excluding depreciation, fell to $39,265 from $46,324. However, including depreciation, the cost rose to $78,805 per bitcoin, exceeding the average value of the bitcoin it mined during the quarter.

Riot did not identify the Corsicana tenant, describing it only as a leading frontier AI lab. The agreement covers 910 megawatts of critical IT capacity and carries approximately $1.8 billion in average annual rent, including escalators. The total potential value rises to roughly $54 billion if both five-year extension options are exercised.

Rent is payable on the full 910 megawatts regardless of actual usage, while the tenant is responsible for substantially all operating expenses, including electricity costs.

CEO Jason Les called the agreement "the largest lease in Riot's history" and noted that its capital requirements are approximately half those of a typical top-tier data center development. Riot does not currently expect to issue equity to finance its announced projects.

Combined with its AMD agreement and an earlier lease at Rockdale with the same AI lab, Riot now has 1,151 megawatts of data center capacity under contract. The company expects these projects to generate more than $2 billion in average annual net operating income once fully deployed.

Riot has been selling bitcoin to finance its expansion. The company sold 20,264 bitcoin during the first nine months of the year for approximately $1.5 billion, primarily to fund data center development.

It ended September with $950.2 million in cash and bitcoin holdings, including $748.2 million in cash and 2,418 bitcoin. Riot also repaid and terminated its $200 million credit facility with Coinbase (NASDAQ: $COIN) and has not issued any equity this year.

Shares of Riot Platforms (NASDAQ: $RIOT) are currently trading at $14.02, down from a 52 week high of $30.32.