Riot Platforms, Inc. (RIOT)

RIOT

11/04/2026 Earnings Call

Summary

Riot Platforms reported third-quarter 2026 total revenue of $181 million, up 1% year-over-year, as $46 million of growth in data center and engineering revenue offset a decline in Bitcoin mining revenue caused by an average Bitcoin price 38% below the prior-year period. GAAP net income was $4 million, or $0.01 per diluted share, and Adjusted EBITDA was $191 million. Net income included $124 million of depreciation and amortization, $21 million of stock-based compensation, and an $18 million non-cash impairment, offset by a $172 million gain on the change in fair value of Bitcoin. The company ended the quarter with $950 million of total liquidity, comprising $748 million of cash including restricted cash and $202 million of Bitcoin, after selling 20,264 Bitcoin year-to-date for $1.5 billion and fully repaying its $200 million Coinbase credit facility.

The quarter's defining event was the signing of a 15-year triple-net powered land lease with a leading frontier AI lab for the entirety of Riot's Corsicana campus, representing 910 MW of critical IT capacity. The deal is expected to generate approximately $28 billion of total contract revenue over the initial term, or approximately $54 billion if both five-year extension options are exercised, with average annual rent of approximately $1.8 billion and an NOI margin of approximately 99%. Total project capital is estimated at approximately $6 million per IT MW, or roughly $5.5 billion, implying an unlevered yield on cost of approximately 33%. The structure roughly halves capital intensity versus a Tier 3 build and shifts operating, technology, and power-price risk to the tenant. Including the 191 MW Rockdale lease with the same frontier AI lab and the 50 MW AMD lease, Riot has contracted 1,151 MW across three leases signed in 2026, representing approximately $38 billion of contracted data center revenue and approximately $2.2 billion of average annual NOI at full deployment, exceeding the top of the $1.6 billion-$2.1 billion portfolio NOI range management outlined at the start of the year.

Operationally, the 25 MW AMD expansion remains on time and on budget, with the next 10 MW delivering this month and the full 50 MW expected online in May 2027. The 191 MW Rockdale Frontier AI Lab deployment is on schedule for first-phase delivery in December 2027, with the remaining 95 MW in June 2028. Corsicana will be delivered in three phases: 400 MW in September 2027, 200 MW in January 2028, and 310 MW in July 2028. Bitcoin mining produced 1,637 Bitcoin in the quarter, or 17.8 per day, at a deployed hash rate of 44.9 exahash per second, or about 4.9% of the global network. Curtailment generated $25 million of power credits, bringing the net cost of power to $0.032 per kilowatt hour and the direct cost to mine to $39,265 per Bitcoin.

Management provided a detailed funding plan that avoids equity issuance. Across Corsicana and Rockdale, total project capital is expected to be approximately $7.6 billion-$7.8 billion, of which approximately $6.1 billion-$7 billion is expected to be funded with non-recourse project debt sized to contracted rent at an illustrative 80%-90% loan-to-cost. That leaves an illustrative Riot cash equity requirement of approximately $800 million-$1.5 billion, covered by approximately $1.2 billion of near-term liquidity, $180 million of AMD term loan proceeds, and approximately $900 million of contracted rent before debt service by the time Corsicana's final phase is delivered. Management said it has not raised equity in 2026 and does not currently anticipate doing so for any announced project. Lease revenue is guided to ramp from approximately $23 million in 2026 to approximately $250 million in 2027, $1.8 billion in 2028, and $2.3 billion in 2029.

Investors should watch execution risk on the Rockdale Tier 3 build, where management expects roughly 70% of the budget to be under guaranteed maximum price contracts, as well as the timing of the Rockdale and Corsicana project financings in a tighter credit market characterized by higher rates and credit-led spread widening. Upside optionality comes from AMD's 150 MW expansion option and roughly 200-250 MW of remaining leasable capacity at Rockdale, plus a five-vertical pipeline for future growth. Management also opened the door to returning capital to shareholders once growth is fully funded, a notable shift in capital allocation rhetoric.

Operations Data

Financial Performance

  • Total revenue: $181 million, up 1% YoY, as $46 million of data center and engineering growth offset lower Bitcoin mining revenue on an average Bitcoin price 38% below Q3 2025.
  • GAAP net income: $4 million, or $0.01 per diluted share.
  • Adjusted EBITDA: $191 million, including a $172 million gain on change in fair value of Bitcoin.
  • Non-cash items: $124 million depreciation and amortization, $21 million stock-based compensation, $18 million impairment.
  • Liquidity: $950 million at quarter end, comprising $748 million cash including restricted cash and $202 million Bitcoin.

Business Segment Analysis

  • Data center: $18 million total segment revenue, including $8 million operating lease revenue at an 80% gross margin and $10 million tenant fit-out. Annualized base rent from the first 25 MW is roughly $31 million, stepping up as the next 10 MW deliver this month.
  • Bitcoin mining: Produced 1,637 Bitcoin, or 17.8 per day, at a deployed hash rate of 44.9 EH/s, about 4.9% of the global network. Average operating hash rate was 36.2 EH/s due to summer curtailment including the 4CP program. Curtailment generated $25 million of power credits, or $15,067 per Bitcoin mined, bringing net power cost to $0.032/kWh and direct cost to mine to $39,265 per Bitcoin excluding depreciation. Held 2,418 Bitcoin at quarter end, down from 11,380 at the end of Q2, by design.
  • Engineering: $47 million revenue, more than double a year ago, at a 15% gross margin reflecting a large low-margin cable procurement order at E4A. Better mix expected in Q4. Backlog of $142 million, more than 90% data center work.

Key Metrics

  • Contracted capacity: 1,151 MW across three leases, with 25 MW in service.
  • Contracted revenue: Approximately $38 billion; approximately $2.2 billion average annual NOI at full deployment on $7.7 billion-$7.9 billion total capital, a roughly 28% unlevered yield on cost.
  • Bitcoin treasury: 2,418 Bitcoin valued at $202 million at the September 30 closing price of $83,554.
  • Debt: $200 million Coinbase facility fully repaid, releasing all 5,821 pledged Bitcoin.

Outlook

Official Guidance

  • Lease revenue ramp: Approximately $23 million in 2026, approximately $250 million in 2027, approximately $1.8 billion in 2028, and approximately $2.3 billion in 2029, the first full year with every phase in service.
  • Capacity delivery schedule: AMD full 50 MW in May 2027; Rockdale Frontier AI Lab first 96 MW in December 2027 and remaining 95 MW in June 2028; Corsicana 400 MW in September 2027, 200 MW in January 2028, and 310 MW in July 2028. All 1,151 MW in service within 20 months.
  • Project capital: Approximately $7.6 billion-$7.8 billion across Corsicana ($5.5 billion) and Rockdale ($2.1 billion-$2.3 billion), with additional AMD CapEx financed through the AMD bank facility.
  • Financing plan: Approximately $6.1 billion-$7 billion of non-recourse project debt at an illustrative 80%-90% loan-to-cost, leaving an illustrative Riot cash equity requirement of approximately $800 million-$1.5 billion. No equity raised in 2026 and none currently anticipated for announced projects.
  • Corsicana economics: Approximately $28 billion total contract revenue over the 15-year initial term, approximately $1.8 billion average annual rent, approximately 99% NOI margin, approximately 33% unlevered yield on cost, and capital returned in roughly three years before leverage.

Management Qualitative Commentary

  • Management expects to exceed the top of its previously communicated $1.6 billion-$2.1 billion portfolio NOI range, with approximately $2.2 billion of average annual NOI on contracts already in place.
  • AMD holds expansion options for up to an additional 150 MW at Rockdale; roughly 200-250 MW of remaining leasable capacity at Rockdale is expected to be taken by existing tenants or strong sidelined interest.
  • Future growth pipeline spans five verticals: expanding capacity at existing sites, acquiring grid-powered land with near-term approved capacity, self-generation behind the meter, corporate acquisitions, and strategic partnerships or joint ventures.
  • Capital allocation priorities include growing the power portfolio, maintaining financial flexibility through non-recourse debt and capital recycling, and returning capital to shareholders when shares offer a better return or growth is fully funded.
  • Bitcoin mining at Corsicana is expected to begin ramping down sometime in summer 2027 ahead of the second phase, with no mining curtailment needed for the first 400 MW tranche.

Q&A Highlights

Q: Given industry cost overruns, what gives confidence that $11 million-$12 million per MW CapEx at Rockdale is sufficient, how much of the project cost is fixed or contracted, and who bears the risk if costs exceed estimates? A: CEO Jason Les said confidence stems from substantial design and pricing work completed before signing. Roughly 70% of the total budget is expected to be under guaranteed maximum price contracts, with the balance for owner-furnished equipment already being procured and expected to be fully ordered this month. At Corsicana, about 70% of capital is a capped tenant reimbursement that cannot increase. Risk allocation is clear: tenant pays for change orders, costs above GMP are the contractor's responsibility with savings shared, and Riot retains risk on non-GMP scope, site conditions, and owner-furnished equipment, managed through early procurement, escalation tables, contingencies, and labor reserves.

Q: What was the thought process behind moving forward with a single tenant for the full Corsicana site, and how did the process evolve? A: Les said it was clear early on that a single-tenant takedown was both the best outcome and the most likely. Subdividing the site would add operating complexity and reduce leasable space, dampening value creation, and all potential tenants expressed interest in the entire site. The company worked through multiple structures and tenants before selecting the best risk-adjusted path. Discussions evolved from the previously disclosed 756 MW LOI to a 910 MW take-or-pay agreement, as the tenant wanted to maximize total site capacity even with varying utilization, while Riot receives rent on the full 910 MW regardless of utilization.

Q: What drove the decision to use this structure rather than a traditional Tier 3 build at Corsicana, and how does the deal compare with others in the market? A: Les said the triple-net structure delivers a rental rate at the high end of the range for a Tier 3 build while requiring only half the CapEx, significantly limiting procurement and construction risk and reducing financing needs for both equity and debt. The rent-credit mechanism, under which 70% of capital spend can be paid through rent credits if reasonable financing terms are unavailable, substantially limits financing risk. The structure also accelerates cash flow, with first phase delivery in September 2027, a timeline he called impossible for a typical Tier 3 deal announced today.

Q: What is the status of AMD's options and remaining leasable capacity at Rockdale, and would Riot consider a similar structure to Corsicana for future leasing? A: Les said AMD holds an option for an additional 150 MW and Riot remains close with the company on its capacity needs. Combined with the rest of the site, roughly 200-250 MW of critical IT capacity remains leasable, which he expects to be taken down by one or both existing tenants, with strong sidelined interest as a fallback. He expects the remainder of Rockdale to be built along the lines already seen there, either AMD-type expansions or another Tier 3 build like the Frontier AI Lab's.

Q: How should investors think about the timeline for decommissioning Bitcoin mining capacity at Corsicana relative to the phase II delivery? A: Les said no Bitcoin mining needs to be taken down to achieve the first 400 MW tranche, but it will need to come down ahead of the second phase. He did not provide a specific schedule but said mining capacity at the site should begin ramping down sometime in summer 2027.

Q: Given uncertainty around the elections, is there any risk to the Rockdale or Corsicana campuses in terms of what Riot can provide and deliver, and how does the political result affect future capacity? A: Les said Riot's position is clear: the interconnections at Rockdale (700 MW) and Corsicana (1 GW) are already fully approved, and both sites have operated for years pulling hundreds of megawatts each, so no additional approval is needed. He cited the launch of two data center developments at Rockdale this year as proof and noted strong in-place community relationships, including about seven years in Rockdale. He added that operating sites with existing substations and substation expansions underway proved time-to-power and helped get the Corsicana deal done on its terms.

Transcript

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Hello, and welcome to Riot Platforms Inc. Third Quarter 2026 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session.

If you would like to ask a question at this time, just press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. As a reminder, this call is being recorded.

I would now like to turn the call over to Josh Kane, head of Investor Relations. You may begin.

Thank you, operator. Good morning, and welcome to Riot Platforms Third Quarter 2026 Earnings Conference Call. My name is Josh Kane, head of Investor Relations.

Joining me on today's call from Riot are Jason Les, chief executive officer, and Jason Chung, chief financial officer.

On the Riot Investor Relations website, you can find our third quarter 2026 earnings press release and accompanying earnings presentation, which are intended to supplement today's prepared remarks, and which include a discussion of certain non-GAAP items.

Non-GAAP 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 2026 performance.

Lease revenue and net operating income figures for our Corsicana lease are management estimates presented before the amortization of tenant reimbursements, which under lease accounting will reduce reported lease revenue over the term.

The basis of presentation is described in the footnotes to the presentation. During today's call, we will be making 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 factor section of our Form 10-K and Forms 10-Q, including for the three months ended September 30, 2026, which will be filed later today, as well as other filings with the Securities and Exchange Commission.

With that, I'll turn the call over to Jason Les, CEO of Riot Platforms.

Thank you, Josh, and good morning, everyone.

Today, we are very pleased to announce that Riot has signed the largest lease in our history, a 15-year triple-net powered land lease with a leading frontier AI lab for the entirety of our Corsicana campus, representing 910 MW of critical IT capacity.

This announcement is the clearest demonstration yet of what Riot has become, a leading digital infrastructure developer serving leaders at the forefront of the AI ecosystem.

With this lease, Riot has now contracted 1,151 MW across three leases with AMD and a leading frontier AI lab, all signed this year, representing approximately $3.8 billion of contracted data center revenue, or $7.2 billion if all extension options are exercised.

Upon full deployment, we expect these leases to generate $2.2 billion of average annual net operating income at an unlevered yield on cost across our lease portfolio of approximately 28%. Four accomplishments define where we stand today.

First, at Corsicana, our lease with the Frontier AI Lab is expected to generate approximately $28 billion in total contract revenue over the 15-year initial term, and approximately $54 billion if both five-year extension options are exercised.

I will spend most of my time today discussing this transaction because it does more than add scale. It fundamentally changes Riot's business profile.

A year ago, our cash flow depended on the price of Bitcoin, and now, at full deployment of currently executed deals, nearly all of our expected cash flow will be generated from long-term leases with leading players in the AI ecosystem.