Riot said its revenues declined as it powered down its Texas operations amid surging electricity demand.
Bitcoin mining heavyweight Riot Blockchain (RIOT) disappointed average analysts’ expectations in its third quarter.
The miner generated $46.3 million in revenues, lower than the average estimate of $56.3 million, bringing net loss to $0.24, compared to an average $1 adjusted net earnings as aggregated by FactSet.
Riot’s revenues were lower than the previous quarter’s $72.9 million, and lower than for the same period last year, when the firm reported $64.8 million. The miner attributed the decrease to the declining price of bitcoin and to its curtailing of activities in response to surging energy demand in Texas, according to a press release on Monday.
RIOT’s share price was down about 1% in after-hours trading on the Nasdaq, following the release of its earnings report.
The miners cash reserves, however, didn’t move much compared to the previous quarter, even as other major miners are saying that they are close to bankruptcy. Riot had $255 million of cash on hand and 6,766 BTC at the end of the third quarter, compared to $270.5 million in cash and 6,653 BTC at the end of Q2.
Riot is one of many miners participating in curtailment processes in Texas, under which they power off their machines when demand surges across the electrical grid in exchange for credits they can use later with the local grid operator. Riot earned $13.1 million in such credits throughout the quarter, $9.5 million of which came in July. Its bitcoin production for that month was down 28% as it participated in this so-called demand response program.
The miners’ hosting revenue, meaning fees it collects for providing infrastructure to other companies’ machines, also decreased quarter-on-quarter from $8.4 million to $9.8 million.
Riot’s mining margins have dropped significantly, similar to other miners. In the second quarter of this year, mining revenue in excess of cost of revenues for the segment was $28.2 million, or 61% of revenue from mining. In the third quarter, it was $7.4 million, about 33% of total mining revenue.