Riot Platforms reports $28M Q2 loss, despite $13.5M from Texas power credits

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BTC block reward mining company Riot Platforms (NASDAQ: RIOT) has reported a net loss of $28 million for the second quarter, despite doubling power credits from the Texas grid operator.

In its earnings report, the Colorado-based miner revealed it generated $76.7 million in revenue, a slight increase from Q2 last year but lower than Wall Street estimates of $84.6 million. It attributed the revenue rise to a 27% spike in BTC production, from 1,395 last year to 1,775 in Q2.

Despite the higher production, the miner recorded a $27.7 million loss, with depreciation and amortization accounting for the highest costs. The loss was 92% lower than the $353 million the company recorded in Q2 last year.

Riot’s revenue from its mining business accounted for $49.7 million, with data hosting and engineering contributing $7.7 million and $19.3 million, respectively.

The company made $13.5 million from power curtailment credits received from ERCOT, the Texas state grid operator. This arrangement, in which ERCOT compensates miners for turning off their mining rigs in times of high demand, has come under fire in recent months.

Miners have been accused of exploiting the system by pre-purchasing their power when the prices are low and then selling it back to the grid at peak prices when demand surges. In Q2, for instance, the revenue Riot generated from this system was equivalent to mining 481 BTC.

In April, Texan lawmakers are pushing a bill to cut off the miners from the program.

In his comments, Riot CEO Jason Lee stated that the company plans on purchasing 33,000 miners from MicroBT, with an option to double the amount in the future. It’s also expanding its immersion cooling in partnership with Midas Immersion, he added.

“As Riot continues to execute on our growth plans for the rest of this year and beyond, I remain extremely excited about Riot’s leading role in driving the cross-industry transformation of energy and money through [BTC] mining,” stated Lee.

Galaxy Digital (NASDAQ: BRPHF), the ‘crypto’ investment firm founded by Wall Street veteran Mike Novogratz, also suffered a $46 million loss in the second quarter, a drastic dip from the $134 million in profits generated in Q1.

Watch: Think of Bitcoin mining as financial self-discipline