When I first saw Riot Platforms' Q2 2025 earnings report, the numbers looked impressive at first glance. The company posted net income of $219.5 million, a dramatic turnaround from recent quarters. But as I dug deeper into the details, it became clear why the stock sold off despite what appeared to be strong results.
The most immediate red flag for me was the revenue miss. While Riot reported $153.0 million in revenue against the FactSet consensus of $156.3 million. Given Riot's recent track record of disappointing investors, this miss reinforced concerns about management's ability to meet their own guidance.
What really caught my attention, though, was the composition of that $219.5 million in net income. The company benefited from a massive $470 million gain on changes in Bitcoin's fair value, which was partially offset by a $158 million loss on contract settlements. This tells me that the earnings quality is questionable at best. Strip away the mark-to-market accounting gains from Bitcoin appreciation, and the underlying operational performance looks far less impressive.
I'm particularly concerned about the deteriorating unit economics in Riot's core mining business. The cost to mine each Bitcoin has essentially doubled to around $49,000 compared to $25,300 in the same quarter last year. This dramatic increase stems from the Bitcoin halving event and rising network difficulty, but it fundamentally undermines the investment thesis for Bitcoin miners. Even with Bitcoin trading at elevated levels, these higher production costs are compressing margins and eating into what should be a period of strong profitability.
In the previous quarter, Riot missed earnings estimates by over 260%, posting a net loss of $296 million. The company has now missed consensus estimates in three of the last four quarters, creating a pattern that's hard for investors to ignore. This track record of disappointing execution has clearly eroded confidence in management's ability to deliver consistent results.
In terms of hashrate, Riot only ranked #6 among public miners, after Mara, IREN, Cleanspark, Cango, and BitFuFu.
The most immediate red flag for me was the revenue miss. While Riot reported $153.0 million in revenue against the FactSet consensus of $156.3 million. Given Riot's recent track record of disappointing investors, this miss reinforced concerns about management's ability to meet their own guidance.
What really caught my attention, though, was the composition of that $219.5 million in net income. The company benefited from a massive $470 million gain on changes in Bitcoin's fair value, which was partially offset by a $158 million loss on contract settlements. This tells me that the earnings quality is questionable at best. Strip away the mark-to-market accounting gains from Bitcoin appreciation, and the underlying operational performance looks far less impressive.
I'm particularly concerned about the deteriorating unit economics in Riot's core mining business. The cost to mine each Bitcoin has essentially doubled to around $49,000 compared to $25,300 in the same quarter last year. This dramatic increase stems from the Bitcoin halving event and rising network difficulty, but it fundamentally undermines the investment thesis for Bitcoin miners. Even with Bitcoin trading at elevated levels, these higher production costs are compressing margins and eating into what should be a period of strong profitability.
In the previous quarter, Riot missed earnings estimates by over 260%, posting a net loss of $296 million. The company has now missed consensus estimates in three of the last four quarters, creating a pattern that's hard for investors to ignore. This track record of disappointing execution has clearly eroded confidence in management's ability to deliver consistent results.
In terms of hashrate, Riot only ranked #6 among public miners, after Mara, IREN, Cleanspark, Cango, and BitFuFu.
I am a research analyst specializing in Bitcoin mining and blockchain infrastructure. With a focus on mining economics, energy efficiency, and the evolving regulatory landscape, I provide data-driven insights into global mining trends.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
I am a research analyst specializing in Bitcoin mining and blockchain infrastructure. With a focus on mining economics, energy efficiency, and the evolving regulatory landscape, I provide data-driven insights into global mining trends.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.