Q1 2024 Riot Platforms Inc Earnings Call

Greetings and welcome to the riot platforms first quarter 2024 financial results Conference call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If you should require operator assistance during the conference. Please press star zero on your telephone keypad as a reminder, this conference is being recorded.

Operator: Greetings and welcome to the Riot Platform's first quarter 2024 financial results conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If you should require operator assistance during the conference, please press star zero on your telephone keypad.

Operator: As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Phil, Vice President of Capital Markets and Investor Relations. Thank you, Phil. You may begin.

Speaker Change: It is now my pleasure to introduce your host.

Speaker Change: Vice President of capital markets and Investor Relations. Thank you you may begin.

Phil Mcpherson: Thank you, Devin. Good morning, and welcome to Riot Platform's first quarter 2024 earnings call. My name is Phil McPherson, and joining me on today's call are Jason Less, CEO; Colin Yee, CFO; and Jason Chung, Executive Vice President of Corporate Development and Strategy. On the Riot Investor Relations website, you can find our first quarter 2024 earnings press release and earnings presentation, which are intended to supplement today's prepared remarks and which include a discussion of certain non-GAAP items.

Devin: Thank you Devin.

Phil Mcpherson: Morning, and welcome to REIT platforms first quarter 2024 earnings call. My name is Phil Mcpherson and joining me on today's call are Jason less CEO, Alan <unk>, CFO, and Jason Chung Executive Vice President of corporate development and strategy.

Phil Mcpherson: On the right Investor Relations website, you can find our first quarter 2024 earnings press release and earnings presentation, which are intended to supplement todays 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 Phi.

Phil Mcpherson: Performance prepared in accordance with GAAP and are included as additional clarifying items to eat investors in further understanding the company's first quarter performance.

Phil Mcpherson: 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 first quarter performance. 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 factors section of our Form 10-K, Form 10-Q included for the quarter ended March 31, 2024, which will be filed today after market close and other filings with the Securities and Exchange Commission. With that said, I would like to turn the call over to Jason Lesch, CEO of Riot Platforms. Thank you.

During today's call, we will make 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 and comments and responses made during two.

Phil Mcpherson: Today's call and in the risk factors section of our Form 10-K Form 10-Q included for the quarter ended March 31, 'twenty 'twenty, four which will be filed today after market close and other filings with the Securities and Exchange Commission.

Phil Mcpherson: With that I would like to turn the call over to Jason less CEO riot platforms.

Jason Chung: Thank you Phil and good morning, everyone.

Jason Les: Thank you, Phil, and good morning, everyone. Riot filed our first quarter 2024 press release and earnings presentation this morning, both of which are available on the Investor Relations section of Riot's website. Riot's primary strategic focus has been on developing a leading, vertically integrated Bitcoin mining company built on the three key pillars of developing and owning operations of significant scale, being a low-cost producer of Bitcoin, and building a balance sheet of strength.

Jason Chung: Right filed our first quarter 2024 press release and earnings presentation. This morning, both of which are available on the Investor Relations section of website.

Jason Chung: Right primary strategic focus has been on developing a leading vertically integrated bitcoin mining company built on three key pillars of developing and owning operations at significant scale being a low cost producer of bitcoin and building our balance sheet strength.

Jason Chung: By focusing on our vertically integrated strategy, we are best able to build these pillars over the past three years, we've been focused on developing this strategy at scale. This began with the acquisition of a Raphael facility its development and operations teams and low cost fixed power contracts.

Jason Les: By focusing on a vertically-integrated strategy, we are best able to build these pillars. Over the past three years, we have been focused on developing this strategy at scale. This began with the acquisition of our Rockdale facility, its development and operations teams, and low-cost, fixed-power contracts.

The strategy continues with the acquisition of Medtronic and the introduction of our engineering segment, which helps control the key supply bottleneck or electrical equipment and building out bitcoin mining infrastructure and finally, the development of our Corsicana facility has broadened our portfolio of access to power capacity and purpose.

Jason Les: The strategy continued with the acquisition of ESS Metron and the introduction of our engineering segment, which helps control the key supply bottleneck for electrical equipment and builds out Bitcoin mining infrastructure. And finally, the development of our Corsicana facility has broadened our portfolio of access to power capacity and purpose-built Bitcoin mining facilities. The benefits of this strategy are on display today, and as a result, we see other miners in the space moving towards a similar strategy.

Jason Chung: Built big point money facilities. The benefits of this strategy are on display today and as a result, we see other miners in the space moving towards a similar strategy. Since Wyatt has developed this strategy most fully and that's you know we are able to build out facilities like corsicana further while others, who have not already.

Jason Les: Since Riot has developed this strategy most fully and at scale, we are able to build out facilities like Corsicana further, while others who have not already ordered key pieces of electrical equipment face 18-plus months of supply chain constraints. The energization of Corsicana this month means that Riot has a clear, fully funded growth path. This landmark achievement is the result of our team's dedication to our long-term strategy. The first phase of this facility puts us well on track to increase our self-mining hash rate to 31x a hash by the end of 2024. The Corsicana facility utilizes immersion cooling for all of its buildings, a technology which Riot is the industry leader in deploying at scale.

Jason Chung: Key pieces of electrical equipment base 18, plus months of supply chain constraints.

Jason Chung: The internalization of course, the candidates month means that riot and had been clear wholly funded growth plan. This landmark achievement is the result of our team's dedication to our long term strategy. The first phase of this facility puts us well on track to increase our soft money in harsh rate to 31 at the house by the end of 2024.

Jason Chung: The corsicana facility utilizes a merchant cooling for all of it.

Jason Chung: Knowledge and what's right is the industry leader in deploying at scale. We are very excited about the incredible pipeline for growth. The corsicana facility provide over the next several years and we look forward to further executing on this plan.

Jason Les: We are very excited about the incredible pipeline for growth the Corsicana facility provides for the next several years, and we look forward to further executing on this plan. Through owning and operating our own site and an unmatched portfolio of 345 megawatts of fixed-price, long-term power agreements, we have the unique ability to execute on our power strategy, which demonstrates the benefits of Bitcoin mining for grid stability and significantly drives down our cost of power.

Jason Chung: Through owning and operating our own site and an unmatched portfolio of 345 megawatts of fixed price long term power agreements, we have the unique ability to execute on our powered strategy, which demonstrates the benefits of bitcoin mining for grid stability and significantly drives down our cost of power.

Jason Les: Power is the primary variable input for Bitcoin mining, and that is why we have built our reputation as a leader in this key part of our business. Making large acquisitions, developing pipelines for growth, and maintaining fixed-price power contracts at scale requires a strong financial and liquidity position. Our unmatched balance sheet strength makes all of this possible and is responsible for their success. With this strong position, we are funding our near and intermediate-term growth plans to expand Corsicana and increase our hash rates through purchasing leading-edge miners on a long-term, fixed-price basis for micro-BTC.

Jason Chung: Power is the primary variable input for Bitcoin mine and that is why we have built our reputation as a leader in this key part of our business.

Jason Chung: Making large acquisitions developing pipelines for growth and maintaining fixed price power contracts at scale requires a strong financial and liquidity position.

Jason Chung: Our unmatched balance sheet strength makes all of this possible and is responsible for their success.

Jason Chung: With this strong position, we are funding, our near and intermediate term growth plans to expand corsicana and increase our hatch rate through purchasing leading edge miners on a long term fixed price basis for Mike or B team.

Jason Chung: In conclusion, we remain focused on the growth and enhancement of our self bonding business in 2023, we terminated two remaining legacy hosting contract at the Rockville facility because of both customers failure to perform under those agreements as a result of the reduction in hosting revenue we have eliminated.

Jason Les: In conclusion, we remain focused on the growth and enhancement of our self-minding business. In 2023, we terminated two remaining legacy hosting contracts at the Rockdale facility because of both customers' failure to perform under those agreements. As a result of the reduction in hosting revenue, we have eliminated the data center hosting business as a separate reporting segment starting in the first quarter of 2024 and are consolidating results into the Bitcoin mining business segment.

Jason Chung: The data center hosting business as a separate reporting segment starting in the first quarter of 2024 and are consolidating results into the big claimed by any business segment.

Jason Les: Riot's focus is maximizing Bitcoin mining results, and our strategy is enabling us to execute on this at an unprecedented scale. With that said, I would like to now turn the call over to Colin Yee, CFO of Riot Blockchain.

Jason Chung: <unk> focus is maximizing bitcoin mining results and our strategy is enabling us to execute on this at an unprecedented scale with that I would like to now turn the call over to Colin Lee CFO of REIT platforms.

Jason Chung: Okay.

Colin Lee: Thank you Jason IMAX.

Colin Yee: Jason, I'm excited to present Riot's financial results for the first quarter of 2024, during which Riot achieved a number of key milestones. For ease of reference, slide five presents a snapshot of key metrics for the first quarter of 2024. Let's go over some highlights on the following page. We own and operate one of the largest Bitcoin mining operations in North America. And during this past quarter, we continued to deploy miners in Rockdale. We have also pushed ahead with development activities at our new Corsicana facility, which has since been energized, and operations have begun.

Colin Lee: I'm excited to present <unk> financial results for the first quarter of 2024 during.

Colin Lee: During which right achieved a number of key milestones for ease of reference slide five presents a snapshot of key metrics for the first quarter of 2024, well, let's go over some highlights on the following pages.

Colin Lee: We own and operate one of the largest bitcoin mining operations in North America and during this past quarter, we continued to deploy miners in rockdale.

We have also pushed ahead with development activities at our new Corsicana facility, which has since been energized and operations have begun.

Colin Lee: At the end of the first quarter of 2024, our bitcoin mining business.

Colin Yee: At the end of the first quarter of 2024, our Bitcoin mining business segment had a total deployed hash rate of 12.4 exahash, which represents an 18% increase year over year. And, as Jason previously mentioned, we anticipate achieving a total self-mining hash rate capacity of 31 exahash by the end of 2024. During the first quarter of 2024, we mined 1,364 Bitcoin, which represents a decrease of 36% from the 2,115 Bitcoin we mined during the first quarter of 2023.

Colin Lee: Segment had a total deployed has rate of 12.4 extra hash.

Colin Lee: This represents an 18% increase year over year and adjacent previously mentioned, we anticipate achieving a total self mining hash rates a paucity of 31 extra hashed by the end of 2024.

Colin Lee: During the first quarter of 2024, we mined 1364, bitcoin, which represents a decrease of 36% from the 2115 to coin we mined during the first quarter of 2023.

Colin Lee: This was primarily due to the significant increase in the bitcoin network difficulty, which has more than doubled since January 2023.

Colin Yee: This was primarily due to a significant increase in the Bitcoin network difficulty, which has more than doubled since January 2023. However, with the significant increase in growth in our hash rate capacity expected by the end of this year, we anticipate producing more Bitcoin per day by the end of the year than we did in the first quarter of 2024, even in spite of the recent halving that occurred a few weeks ago on April 20th, 2024.

Colin Lee: However, with a significant increase in growth in our hatchery capacity expected by the end of this year, we anticipate producing more bitcoin per day by the end of the year than we did in the first quarter of 2024, even in spite of the recent having that occurred a few weeks ago on April 20th 'twenty 'twenty four.

Colin Lee: Brian ended the first quarter of 'twenty 'twenty four with 8490 bitcoin.

Colin Yee: Riot ended the first quarter of 2024 with 8,490 Bitcoin, up significantly relative to the 7,094 Bitcoin that we held at the end of the first quarter of 2023. In the first quarter of 2024, Riot reported total revenue of $79.3 million, as compared to $73.2 million for the first quarter of 2023, an 18% increase year-over-year. This increase was primarily driven by a 131% increase in average Bitcoin prices year-over-year, offset by lower Bitcoin production, which decreased 36% year-over-year, again due primarily to a significant increase in Bitcoin network difficulty, which has more than doubled since January 2022.

Colin Lee: Up significantly relative to the 7094 big coin that we held at the end of the first quarter 2023.

Colin Lee: In the first quarter of 2024, right reported total revenue of $79 $3 million as compared to $73 $2 million for the first quarter of 2023.

Colin Yee: In footnote number one, you should note that power curtailment credits received totaled approximately $5.1 million for the quarter, as compared to $3.1 million during the first quarter of 2023. And this equates to approximately $98 in Bitcoin, as computed by using average daily closing Bitcoin prices on a monthly basis. If these power credits received were applied to our total cost of revenues, our non-GAAP gross profit margin would have equaled $37.3 million, or a 47% margin.

An 18% increase year over year.

Colin Lee: This increase was primarily driven by a 131% increase in average bitcoin prices year over year.

Colin Lee: Offset by lower bitcoin production, which decreased 36% year over year.

Colin Lee: Again, due primarily to the significant increase in bitcoin network difficulty, which has more than doubled since January 2023.

Colin Lee: In footnote number one you.

Colin Lee: You should note that power curtailment credits received totaled approximately $5 $1 million for the quarter as compared to $3 1 million during the first quarter of 2023.

Colin Lee: And this equates to approximately 98 bitcoin.

Colin Lee: Is computed by using average daily closing bitcoin prices on a monthly basis.

Colin Lee: If these power credits received were applied to our total cost of revenues. Our non-GAAP gross profit margin would have equaled $37 $3 million or a 47% margin.

Colin Lee: non-GAAP adjusted EBITDA for the first quarter was $245 $7 million as compared to the non-GAAP adjusted EBITDA of $81 $7 million in the first quarter of 2023.

Colin Yee: Non-GAAP adjusted EBITDA for the first quarter was $245.7 million as compared to non-GAAP adjusted EBITDA of $81.7 million in the first quarter of 2023, based on FASB's final standard on crypto assets issued in December 2023, under which Riot now recognizes its Bitcoin held at fair value, and with changes in fair value now recognizing income. Riot elected to early adopt this guidance in 2020.

Colin Lee: Based on these final standard.

Crypto assets issued in December 2023, under which right now recognizes it's bitcoin held at fair value.

Colin Lee: And with changes in fair value are now recognized in income.

Colin Lee: Right elected to early adopt this guidance in 2023.

Colin Lee: Net income for the quarter was $211 $8 million or 82 per share compared to net income of $18 $5 million or <unk> 11 per share for the same period in 2023.

Colin Yee: Net income for the quarter was $211.8 million, or $0.82 per share, compared to net income of $18.5 million, or $0.11 per share, for the same period in 2023. As a reminder, our net income for the quarter included a change in the fair value of Bitcoin equal to $234.1 million, non-cash stock-based compensation expense of $32 million, and depreciation and amortization of $32.3 million. Beginning in the first quarter of 2024, we adjusted our depreciation schedule for mining hardware from a two-year to a three-year schedule based on our evaluation of market practice and our own operational history.

Colin Lee: As a reminder, our net income for the quarter included a change in the fair value of bitcoin equal to $234 $1 million.

Colin Lee: Noncash stock based compensation expense of $32 million.

Depreciation and amortization of $32 $3 million.

Colin Lee: Beginning in the first quarter of 'twenty 'twenty four we adjusted our depreciation schedule for mining hardware from a two year two or three year schedule.

Colin Lee: Based on our evaluation of market practice, and our own operational history.

Colin Lee: In 2023 riot terminated its two legacy data center hosting agreements.

Colin Yee: In 2023, Riot terminated its two-legacy data center hosting agreement. During the first quarter of 2024, revenue from the final date of the Center Hosting Agreement was no longer material for both revenue and profit. And so, commencing this quarter, we will no longer report data center hosting as a separate reportable segment. We also have no plans to offer data center hosting services to new customers.

During the first quarter of 2020 for revenue from the final data center hosting agreement was no longer material from both revenue and profit.

So commencing this quarter, we will no longer report data center hosting as a separate reportable segment.

Colin Lee: We also have no plans to offer data center hosting services to new customers.

Colin Lee: For the first quarter of 2020 for Bitcoin mining revenue totaled $74 $6 million, which included $32 million in hosting revenue.

Colin Yee: For the first quarter of 2024, Bitcoin mining revenue totaled $74.6 million, which included $32 million in hosting revenue, an increase of $26.6 million year over year. This increase was primarily due to higher Bitcoin prices in the first quarter of 2024, which averaged $52,343 compared to $22,706 in the first quarter of 2023. However, this increase is partially offset by a decrease in Bitcoin mined in the first quarter of 2024 compared to the first quarter of 2023, again due to a significant increase in the Bitcoin network difficulty.

Colin Lee: Increase of $26 $6 million year over year.

Colin Lee: This increase was primarily due to higher corn prices in the first quarter of 2024, which averaged $52343 compared to 22000 and $706 in the first quarter of 2023.

Colin Lee: However, this increase was partially offset by a decrease in bitcoin mined in the first quarter of 2024 compared to the first quarter of 2023.

Colin Lee: Again due to the significant increase in the Bitcoin network difficulty.

Colin Lee: Bitcoin mining cost of revenue primarily consists of direct production costs, including electricity labor and insurance.

Colin Yee: Bitcoin mining cost of revenue primarily consists of direct production costs, including electricity, labor, and insurance, and excludes depreciation and amortization. Bitcoin mining revenue in excess of Bitcoin mining cost of revenue for the quarter was $33.5 million, which is a margin of 45% as compared to $26.1 million or a margin of 54% from the first quarter of 2023. This increase was primarily driven by the increase in revenues from the expansion of Bitcoin mining capacity at our Rockdale facility. If power credits were directly allocated to Bitcoin mining, what would be the cost of revenue?

Colin Lee: Excludes depreciation and amortization.

Colin Lee: Bitcoin mining revenue in excess of bitcoin mining cost of revenue for the quarter was $33 $5 million, which is a margin of 45% as compared to $26 $1 million or a margin of 54% from the first quarter of 2023.

Colin Lee: This increase was primarily driven by the increase in revenues from the expansion of bitcoin mining capacity at.

Colin Lee: At our Rockdale facility.

Colin Lee: If power credits were directly allocated to bitcoin mining cost of revenue.

Colin Yee: Bitcoin mining cost of revenue would have decreased by $5.1 million, increasing our Bitcoin mining margin to $38.6 million or 52% on a non-gap basis. Bitcoin mining costs also included $4.5 million of power costs for the remaining hosting contractors. Slide 9 breaks down Riot's cost to mine. The first quarter of 2024 for Riot had changes to our reporting segment. In 2023, Riot terminated the two remaining agreements under the legacy data center hosting business due to the failure of both customers to meet their obligations under the agreement.

Colin Lee: Bitcoin mining cost of revenue would have decreased by $5 $1 million, increasing our bitcoin mining margin to $38 6 million or 52% on a non-GAAP basis.

Colin Lee: Bitcoin mining costs also included $4 $5 million of power cost, where the remaining hosting contracts.

Colin Lee: Slide nine breaks down rights cost to mine the.

Colin Lee: The first quarter of 2024 for riot had changes to our reporting segments.

Colin Lee: In 2023 right terminated the two remaining agreements under the legacy data center hosting business due to the failure of both customers to meeting their obligations under the agreements.

Colin Yee: As such... Costs that had previously been captured and reported in the data center hosting segment have been absorbed by our self-mining operations and presented within the Bitcoin mining segment in our first quarter 2024 financial statement. Direct cost to mine in the first quarter 2024 was $23,034 per Bitcoin, while power costs were $16,764 or 73% of the total. Other costs of $6,270 represent the remaining 27%. The increase in the global network hash rate and the company's increase in network difficulty was the primary driver behind an increase in the Riot's average direct cost-to-mine. Other costs include direct labor, minor insurance, minor and minor related equipment repairs, land lease and related property taxes, network costs, and other utility expenses.

Colin Lee: As such.

Colin Lee: Costs that had previously been captured and reported in the data center hosting segment have been absorbed by our self mining operations and presented within the Bitcoin mining segment in our first quarter 2024 financial statements.

Colin Lee: Direct cost of mine in the first quarter of 2024 was $23034 per bitcoin.

Colin Lee: Which power costs were $16764 or 73% of the total.

Colin Lee: Other costs of $6270 represents the remaining 27%.

Colin Lee: The increase in the global network cash rate in company increase in network difficulty was the primary driver behind the increase in rights average direct cost to mine bitcoin.

Colin Lee: Other costs include direct labor minor insurance minor and minor related equipment repairs land lease and related property taxes.

Colin Lee: Network costs and other utility expenses.

Colin Lee: We have already ordered new micro <unk> machines to be deployed at a rockdale facility.

Colin Yee: We have already ordered new MicroBT machines to be deployed at our Rockdale facility, of which deployment will begin in the second quarter of 2024, and as additional hash rate is deployed and operational uptime is increased, we expect increased production of Bitcoin at the Rockdale facility. As production increases, these fixed costs will be spread across a greater number of Bitcoin produced, thereby lowering our cost to mine each bitcoin. Riot's engineering business, carried on through Riot's wholly owned subsidiary of ESS Metron, reported revenue of $4.7 million in the first quarter of 2024, as compared to $16.1 million for the same three-month period in 2020.

Colin Lee: Which deployment will begin in the second quarter 2024.

Colin Lee: And as additional hash rate is deployed and operational uptime is increased we expect increased production of bitcoin at the Rockville facility.

Colin Lee: So.

Colin Lee: As production increases these fixed costs will be spread across a greater number of bitcoin produced.

Colin Lee: Thereby lowering our cost of mine each bitcoin.

Colin Lee: Right Engineering business.

Carried on through rights wholly owned subsidiary of E. S. S Metro on rips.

Colin Lee: <unk> reported revenue of $4 $7 million in the first quarter of 2024.

Colin Lee: As compared to $16 $1 million for the same three month period in 2023.

Colin Lee: The decrease of $11 4 million was primarily attributable to global supply chain constraints, resulting in decreased receipts of materials.

Jason Les: The decrease of $11.4 million was primarily attributable to global supply chain constraints resulting in decreased receipts of material. This delayed the completion of certain custom products for two large projects, potentially worth $13.2 million, which ended up not being delivered in the quarter, and therefore, we were not able to recognize this revenue. The supply chain shortages also impacted projects in our backlog due to the lack of manufacturing capacity. However, we anticipate that the supply chain issues currently impacting our engineering results will be resolved by the end of the third quarter of this year.

Colin Lee: This delayed the completion of certain custom products for two large projects potentially worth $13 $2 million, which ended up not being delivered in the quarter.

Colin Lee: And therefore, we were not able to recognize this revenue.

Colin Lee: The supply chain shortages also impacted projects in our backlog due to the lack of manufacturing capacity.

Colin Lee: However, we anticipate that the supply chain issues currently impacting our engineering results will be resolved towards the end of third quarter of this year.

Colin Lee: Engineering gross margin for the quarter was similarly impacted by these issues, resulting in a gross loss of $1 $3 million as compared to a gross profit of zero point $5 million for the first quarter of 2023.

Jason Les: Engineering gross margin for the quarter was similarly impacted by these issues, resulting in a gross loss of $1.3 million, as compared to a gross profit of $0.5 million for the first quarter of 2023. I will now turn the call back over to Jason.

Jason Chung: I will now turn the call back over to Jason loss.

Jason: Thank you Colin.

Jason: Pictured on this slide is an aerial shot of our new Corsicana facility. We purchased the land for this facility in 2022 due to its strategic location next to the Navarro switch, where one gigawatt of power capacity was available.

Jason Les: Pictured on this slide is an aerial shot of our new Corsicana facility. We purchased the land for this facility in 2022 due to its strategic location next to the Navarro switch, where one gigawatt of power capacity was available. Over the past two years, we have worked to develop this site to support reaching one gigawatt in total capacity, beginning with the first phase consisting of 400 megawatts of 100% immersion-cooled Bitcoin mining infrastructure, which spans four total buildings. The 400 megawatt substation for the first phase of Corsicana's development was energized last month, and mining operations have already commenced.

Jason: Over the past two years, we have worked to develop this site support reaching one gigawatt in total capacity, we're getting with the first phase consisting of 400 megawatts of 100% immersion called bitcoin mining and infrastructure, which spans four total buildings.

Jason: 400 megawatt substation for the first phase of course, a candidate development was energized last month and mining operation have already commenced.

Jason Les: Construction remains underway to complete the rest of the first phase by the end of 2024, and in 2025, we intend to continue development of this site to eventually reach one gigawatt in total capacity, which would give the Corsicanas facility status as the largest dedicated Bitcoin mining facility in North America and potentially globally. RIPE's infrastructure pipeline and long-term miner purchase agreement with MicroBT provide us with a clear and direct path to reaching 100x the hash rate in self-mining hashrate.

Jason: Construction remains underway to complete the rest of the first phase by the end of 2024 and in 2025, we intend to continue development of this site to eventually reach one gigawatt in total capacity, which would submit course at Qantas, but of course, the Kansas facility status as the largest dedicated bitcoin mining facility in North America.

Jason: And potentially globally.

Jason: Right infrastructure pipeline and long term minor purchase agreement with micro Beachy provides us with a clear and direct path to reaching 100 extra hash and self bonding harsh rate.

Jason: Based on our current purchase agreement and development plan Wyatt plan to exit 2024, with a total hash rate of 31 extra cash. This includes $2 seven Xtra has a growth at our Rockville facility.

Jason Les: Based on our current purchase agreement and development plans, Riot plans to exit 2024 with a total hash rate of 31x a hash. This includes 2.7 exahash of growth at our Rockdale facility and 16 exahash of new growth at our Forza Canada facility.

Jason: 16 extra hash of new growth at airports at Canada facility.

Jason Les: Altogether, when fully developed, this would represent a 154% increase in self-mining hashrate over 2024. Fully developing the Corsicana facility through the remaining 600 megawatts of remaining capacity following the completion of the first phase of development and executing a part of our purchase option of micro-BT M66 S-minors would allow Riot to reach nearly 60 exahash in total hashrate capacity. In other words, Corsicana provides a substantial amount of the infrastructure needed for Riot to utilize its purchase options with Micro-BT and reach our 100x the hash goal. These components give Riot the most directly visible and predictable pipeline in the Bitcoin mining sector.

Jason: Altogether when fully developed this would represent a 154% increase in self bonding hash rate over 2024.

Jason: Fully.

Jason: Hoping the corsicana facility through the remaining 600 megawatts of remaining capacity. Following the completion of the first phase of development and executing a part of our purchase option of micro <unk> and 66 S miners.

Jason: Would allow riot to reach nearly 60 extra hash and total heartbreak capacity in other words coarser cannot provide a substantial amount of the infrastructure needed variety utilizing purchase options with microbial G and reach our 100 extra high school. These components give riot the most directly.

Jason: The bowl and predictable pipeline.

Jason: The bitcoin mining sector.

Jason: In order to fully utilize our pipeline of infrastructure over the past 12 months, we have entered into a series of agreements with micro <unk> to a total of 32 extra hash of next generation miners.

Jason Les: In order to fully utilize our pipeline of infrastructure, over the past 12 months, we have entered into a series of agreements with MicroBT for a total of 32 exahash of next generation miners. The decision to enter these large-scale purchase agreements came after several months of testing various latest-generation micro-BT miners in both immersion and air-cooled environments and observing strong operating performance. As a result of this investment, full deployment of our purchase orders is expected to improve our overall fleet efficiency by 21.3% to 21.8 joules per terahat.

Jason: The decision to enter these large scale purchase agreement came after several months of testing various latest generation micro btu miners in both immersion.

Jason: Airport environment and observing strong operating performance.

Jason: As a result of this investment.

Jason: Full deployment of our purchase orders is expected to improve our overall fleet efficiency by 21, 3% to 21 eight George for Jarrod harsh.

Jason Les: As part of our long-term agreement with MicroVT, we have purchase options for an additional 75 Exahash of miners on terms substantially similar to our original order. This option provides for a fixed price ceiling of $16.50 per terahash on next generation miners in order to support Riot further growing its fleet and improving overall efficiency. Assuming full exercise of our purchase options and deployment of those miners, our fleet efficiency would improve even further to 19.7 joules per terahertz.

Jason: As part of our long term agreement with micro <unk>, we have purchase options for an additional 75 extra hash of miners on terms substantially similar to our original order.

Jason: This option provides for a fixed price ceiling of $16 50 per <unk> on next generation miners in order to support riot further growing its fleet and improving overall efficiency.

Jason: Assuming full exercise of our purchase option and deployment of those miners are fleet efficiency would improve even further to $19 seven joules per carat hash.

Jason: Riot prioritizes, maintaining a strong balance sheet with significant cash and <unk> holdings in order to drive long term value creation for our shareholders. As a result, we can act decisively and continuously scale our business to meet the growing opportunities in the bitcoin mining space.

Jason Les: Riot prioritizes maintaining a strong balance sheet with significant cash and Bitcoin holdings in order to drive long-term value creation for our shareholders. As a result, we can act decisively and continuously scale our business to meet the growing opportunities in the Bitcoin mining industry. Our current growth plans to reach over 40 exahashed in 2025 call for $619 million in capital expenditures, which you can see broken down on this slide. We have sufficient financial resources to fund these growth plans entirely, and we expect to end 2025 with total liquidity exceeding that at the end of the first quarter of 2024.

Jason: Our current growth plans to reach over 40 extra half in 2025 copper $619 million in capital expenditures, which you can see broken down on this slide.

Jason: We have some we have sufficient financial resources to fund these growth plans entirely and we expect to end 2025 with total liquidity exceeding that out of the ended the first quarter of 2024.

Jason: Yeah.

Jason: Right vision is to be the world's leading bitcoin driven infrastructure platform strategy, we have been executing on over the past. Several years has now begun bearing the results, which position us to realize this vision.

Jason Les: Wright's vision is to be the world's leading Bitcoin-driven infrastructure product. The strategy we have been executing on over the past several years has now begun bearing results which position us to realize this vision. Through our vertically integrated strategy, we have created an unmatched infrastructure growth pipeline to increase our hash rate by 154% this year to 31x the hash rate and to ultimately lead us to our goal of reaching 100 extra hash in total self-minding hash.

Jason: Through our vertically integrated strategy, we have created an unmatched infrastructure growth pipeline to increase our hatch rate by 154% this year to 31 Exxon ash.

Jason: And to ultimately lead us to our goal of reaching 100 extra has in total self money nationally.

Jason: Right balance sheet strength underpins, our ability to achieve these targets and as a result, our 'twenty 'twenty four and 'twenty 'twenty five growth plans are fully funded.

Jason Les: Riot's balance sheet strength underpins our ability to achieve these targets, and as a result, our 2024 and 2025 growth plans are fully funded. We are incredibly excited about what Riot is accomplishing this year, and we look forward to executing on our stated goals on our path to achieving 100x ahead. Thank you all for listening to our presentation. We would now like to open the call to questions.

Jason: We are incredibly excited about what we're about what right. It's accomplishing this year and we look forward to executing on our stated goals on our path to achieving 100 X dash.

Speaker Change: Thank you all for listening to our presentation, we would now like to open the call for questions operator.

Operator: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key.

Speaker Change: Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.

Speaker Change: Information tunnel indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys one.

Operator: One moment, please, while we poll for questions. Phil, the floor is now yours for the Q&A session. Thank you, Devin. We'll take our first call from Kevin Deedy at H.C. Wainwright. Kevin?

Speaker Change: One moment, please while we poll for questions.

Speaker Change: So the floor is now yours for the Q&A session.

Speaker Change: Yeah.

Speaker Change: Thank you Devin we will take our first call from Kevin Dede H C Wainwright Kevin.

Phil Mcpherson: Thank you, Devin. We'll take our first call from Kevin Deedy at H.C. Wainwright. Kevin? Kevin? Nope, looks like he dropped off. We'll move to the next one. Our next question will come from Greg Lewis at BTI.

Speaker Change: Kevin.

Speaker Change: So it looks like he dropped off.

Speaker Change: We'll move to the next one our next question will come from Greg Lewis of BTG.

Greg Lewis: Yes, hi, Thank you and good morning, good afternoon.

Greg Lewis: Yes, hi, thank you. And good morning. Good afternoon.

Speaker Change: Jason.

Greg Lewis: Just watching this strategy unfold in terms of the bitcoin inventory management.

Jason Les: You know, Jason, you know, just watching the strategy unfold in terms of Bitcoin inventory management. You know, it seems like, you know, we've kind of gone through ebbs and flows in terms of, you know, funding some operations with Bitcoin. You know, more recently, at least based on the monthly production guidance, it seemed like we started holding back and really trying to build that Bitcoin inventory in February and March. I don't think we saw, I think maybe we saw a couple of Bitcoin, you know, post the halving, now as we look at, you know, I guess May and beyond.

Greg Lewis: It seems like we've kind of gone through ebbs and flows in terms of funding.

Greg Lewis: Funding some operations with Bitcoin you know more recently at least based on the monthly production guidance. It seemed like we started holding back in and really trying to build that.

Greg Lewis: Coin inventory in February and March I don't think we I think maybe we saw a couple of bitcoin.

Greg Lewis: Post the having now is as we look at the I guess may and beyond how are.

Jason Les: How are you thinking about managing, you know, the puts and takes in terms of using the Bitcoin that you're generating to kind of offset some costs and then, at the same time, trying to build that inventory? Any kind of thoughts around that? Sure. Thanks, Greg.

Greg Lewis: Are you thinking about managing the you know the puts and takes in terms of using bitcoin that youre generating too.

Greg Lewis: To kind of off offset some costs and then at the same time.

Greg Lewis: Trying to build that inventory in any kind of thoughts around that.

Greg Lewis: Sure.

Jason Les: So, our strategy is to always maintain a strong balance sheet. I think by now, we've all seen how this has played out as a key strength for Riot. This includes both in cash and in Bitcoin. We're here because we're a Bitcoin company. We believe in the long-term value of Bitcoin. So, we try to hold as much Bitcoin as possible. As you noted, at the beginning of this year, in January, we stopped selling Bitcoin.

Speaker Change: Thanks, Greg So our strategy is to always maintain a strong balance sheet I think by now we've all seen how this has played out as a key strength for right. This includes both in cash and a big claim we are here because we are a big company. We believe in the long term value of bitcoin. So we try to hold as much big point as possible as you know.

Greg Lewis: At the beginning of this year in January we stopped selling bitcoin in February and March through our monthly updates. We have reported we have not sold any bitcoin.

Jason Les: In February and March, in our monthly updates, we reported that we have not sold any Bitcoin. So currently, we are not selling any Bitcoin. However, we are continuing to monitor our balance sheet in light of what we need for capital expenses and what we need for operational growth. By maintaining such a strong balance sheet with a cash position that we're reporting today, we have sufficient cash reserves and, you know, further access to cash through our ATM program to continue to fund all of our growth plans and our operating expenditures.

Greg Lewis: So currently we are not selling any bitcoin. However, we are continuing to always monitor monitor our balance sheet.

Speaker Change: Light of what we need for capital expenses, and what we need for operational growth.

Speaker Change: Maintaining such a strong balance sheet with a cash position that we're reporting today, we have sufficient cash reserves and further access to cash through our ATM program to continue to fund all of our growth plan and our operating expenditures. So it's a decision that we're making on a month by month basis evaluating the market.

Jason Les: So it's a decision that we're making on a month-by-month basis, evaluating the market, evaluating the financing options, evaluating our cost of capital, and, with the parallel goal of trying to hold as much Bitcoin as possible. Okay, great.

Speaker Change: <unk> and the financing options valuing our cost of capital and.

Speaker Change: With the parallel golar trying to hold as much equity as possible.

Speaker Change: Okay, Great and then just my other question was on the on the engineering business realizing that it's not a major driver of the of the company clearly that's the bitcoin mining.

Greg Lewis: And then just my other question was about the engineering business, you know, realizing that, you know, it's not a major driver of the company, clearly, that's Bitcoin mining. But there was kind of a, you know, I guess there's a two-part question here in terms of the engineering. The first question is, is there any seasonality that we should be thinking about as we look out and, you know, over the next, I don't know, three, four quarters?

Speaker Change: But there was kind of a I guess theres a two part question here in terms of the engineering.

Speaker Change: With the first being is is there any seasonality that we should be thinking about as we look out.

Speaker Change: Over the next I don't know three or four quarters and then also I was kind of curious clearly you know when you when you bought Medtronic.

Greg Lewis: And, and then, also, I was kind of curious, you know, clearly, when you bought Metron, there was an opportunity to kind of get involved on the on the infrastructure equipment side, not realizing maybe that that riot's core function as a minor isn't going to be around AI data centers. Is that business? Metron is it positioned at all to benefit from kind of this ongoing AI infrastructure wave that seems like it's, you know, we're in the midst of?

Speaker Change: There is an opportunity to kind of get involved on the on the infrastructure equipment side.

Speaker Change: Not realizing maybe that riots core function as a minor isn't going to be around AI data centers is that business Medtronic is that position at all to benefit from kind of this ongoing AI infrastructure way, but that seems like it's it's you know.

Speaker Change: We're in the midst of.

Jason Les: Yeah, so I'll tackle those starting with the last question, Craig. First, there is incredible demand for this type of electrical equipment right now. While Riot owns ESS Metron, we are one of their smallest customers. Overall, they have a ton of business and a ton of demand from all these data centers, AI data centers, that are rapidly trying to build out and meet demand for this type of service. So they are really overloaded with business opportunities, and what has limited them has been manufacturing warehouse capacity and access to input parts from the global supply chain.

Speaker Change: Yes, So let me tackle those starting with the last question. Greg. So first there is incredible demand for this type of electrical equipment right now.

Speaker Change: All right.

Speaker Change: It's much Ron we are one of the smallest customers overall, they have a ton of business in a ton of demand from all of these data centers AI data centers that are rapidly trying to build out and meet demand for this type of service.

Speaker Change: They are really overloaded with.

Speaker Change: With business opportunity and what is limited on manufacturing and warehousing capacity.

Speaker Change: And.

Speaker Change: The access to the input parts from the global supply chain. So they are benefiting quite a bit from this and we are looking to increase the capacity of this business. So they can they can meet the demand for these for.

Jason Les: So they are benefiting quite a bit from this, and we are looking to increase the capacity of this business so they can meet the demand for these data centers and AI data centers, et cetera. But as you stated, our number one purchase, the reason for purchasing the ESS Metron, was strategic. One, we noted in our deck here, it has reduced our CapEx expense for purchasing this electrical equipment from them by about $10 million over the two years since we acquired them.

Speaker Change: These data centers in AI data.

Speaker Change: Data centers et cetera, but as you stated our number one purchase reason for purchasing the assessment drawn one strategic.

Speaker Change: One we noted in our deck here it has reduced our capex expense for purchasing this electrical equipment from them by about $10 million over the two years since we've acquired them, but even more important in that it had been.

Jason Les: But even more important than that, it has been a critical component of controlling our supply chain that while other competitors might have to rely on external parties to procure their electrical equipment and design, custom engineer, and design what they need, we're able to control this in-house. We have visibility in the supply chain. We can move around this. We can make changes. It's been very advantageous to us as we've built out both Rockdale and Corsicana.

Speaker Change: A critical component.

Speaker Change: Controlling our supply chain that while other competitors might have to rely on external parties to procure the electrical equipment and design custom engineering design, what they need we're able to control. This in house, we have visibility of that supply chain. We can move around this we can make changes it's been very advantageous to us as we built out both rockdale.

Speaker Change: And of course, we cannot.

Speaker Change: Then your first part of your question, though was the seasonality of results I think you will see.

Jason Les: Then the first part of your question was about seasonality of results. I think you will see a good amount of seasonality this year. Like we noted, the first quarter results were impacted by these global supply chain issues, which held back, asked about, quite full of data center and AI.

Speaker Change: A good amount of seasonality this year like we noted the first quarter results were impacted by these global support.

Speaker Change: Global supply chain issues, which held back.

Speaker Change: Two big orders for moving forward, so not only did those orders not move forward and be recognized as revenue, they're occupy space that stopped other jobs from being completed so we.

Speaker Change: These to be caught up during the second half of 2024, we have additional warehouse space, we procured there on top of resolving the supply chain issues. So that will allow these two.

Speaker Change: Contracts to reward we can recognize revenue and then we can keep the backlog flow into the other demand, which is as you asked about <unk>.

Speaker Change: Quite full of data center and AI infrastructure.

Greg Lewis: Perfect. Super helpful. Thank you very much.

Speaker Change: Perfect Super helpful. Thank you very much.

Jason Les: Thanks, Greg.

Speaker Change: Thanks, Brian.

Speaker Change: Our next question is from Mike <unk> from H C Wainwright Mike.

Mike Colnessy: Our next question is from Mike Colnessy from HC Wainwright. Mike?

Mike: Hi, Good morning, guys and thank you for taking my questions. First one is really more of a high level question for me just curious how you guys are thinking about the operating environment here with harsh prices at all time lows post having the implications for your growth trajectory at riot and how you expect the M&A landscape to play out as loss.

Mike Colnessy: Hi, good morning, guys. And thank you for taking my questions. The first one is really more of a high-level question for me. Just curious how you guys are thinking about the operating environment here with hash prices at all-time lows, which has implications for your growth trajectory at Riot, and how you expect the M&A landscape to play out as less efficient miners are forced to power down here.

Mike: Fisher miners are forced to power down here.

Jason Les: question, then I'll turn it over to Jason Chung, our Head of Corporate Development, to talk about M&A here. I think, you know, the halving is always a tough time for miners. Immediately after this one, it seemed not as bad because of the huge influx of transaction fees that we saw, right? There were blocks with 30 Bitcoin in transaction fees, and it scaled up from there, but that really offset the decrease from the block reward halving.

Speaker Change: Sure. Thanks for the question, Mike Let me ask answer the first part and then.

Speaker Change: Good question and I'll turn it over to Jason Zhang our head of corporate development to talk about M&A here.

Speaker Change: I think you know the habit is always a tough time for minors immediately after this one.

Jason Zhang: Not as bad because the huge influx of transaction fees that we thought we saw right different blocks with 30, bitcoin and transaction fees and scaled up from there, but that really offset the decrease in the from.

Jason Les: But that has subsided, and recently the price has gone down. I think by focusing on being a low-cost producer, Riot is very well positioned for these types of Scroft Periods in Bitcoin Mining Economics. Coming into the summer here, especially with our power strategy, we are able to be very responsive to the price of power.

Jason Chung: [inaudible]

Jason Zhang: The block reward.

Jason Zhang: Hum.

Jason Zhang: But that has subsided and recently the price has gone down I think by focusing on being a low cost producer riot is very well positioned for these types of.

Jason Zhang: Trough periods and <unk> remind me the economics.

Jason Zhang: Coming into the summer here, especially with our power strategy, we were able to be very responsive with the price of power.

Jason Zhang: Use that to lower our direct cost of mine and that allows ryan to be a low cost producer when others have to fall off the network here and when.

Jason Zhang: The higher cost producers fall off.

Jason Zhang: As you know difficult to adjust that and then that widens the margin again as we're mining more bitcoin. So we believe this is the type of environment, where riots strategic pillars are on full display obviously, we're long term bullish on bitcoin.

Jason Zhang: Talked about we're holding back one because we believe in.

Jason Zhang: The upside of this system long term, but to be to reach that long term to be a leading bitcoin mining company. We have to focus on having this low cost of power and maintain a low cost of production through more difficult point in the market, but on the M&A question. I'll go ahead, and I'll turn it over to Jason John.

Jason Chung: Thank you, Jason. Hey Mike, thanks for the question.

Jason John: Thank you, Jason Hey, Mike Thanks for the question.

Jason John: From our perspective, historically I think deals have really been tendered in the sector by a number of factors.

Jason Chung: From our perspective, historically, you know, I think deals have really been hindered in the sector by a number of factors. We can look at volatility in the underlying public miner stock, volatility in the underlying Bitcoin price, differences in Bitcoin price expectations across buyers and sellers, among other factors. And all of these factors have really led to what we've seen as a fairly wide gap between buyer expectations on valuation and seller expectations on valuation historically.

Jason John: We can look at it volatility and the underlying public stock.

Jason John: Stock volatility in the underlying bit quaint prices dip.

Jason John: Differences in the corn price expectations across buyers and sellers among other factors and all of these factors have really led to it.

Jason John: What we've seen is a pretty a fairly wide gap between.

Jason John: Buyer expectations on valuation and seller expectations on valuation historically.

Jason Chung: But I think our sense is that that gap has started to narrow, particularly pre-having, and now that we're post-having, I think that trend will continue. At the same time, we've seen very healthy deal flow pre-having, and we think that deal flow will further increase post-having. So when you take these two factors together, I think there's a really interesting window of opportunity for deals to be done in the sector. On our side, we spent a lot of time building out what we believe is the most sophisticated corporate development team in our space, precisely to address this upcoming window.

Jason John: But I think our sense is that that gap has started to narrow, particularly pre having and now that we're close to having I think that trend will continue.

Jason John: At the same time, we've seen very healthy deal flow pre happy.

Jason John: And we think that deal flow will further increase towards having so when you take these two factors into consideration together I think there's a really interesting window Disney approaching for deals to be done in the sector.

Jason John: On our side, we spent a lot of time.

Jason John: Building out what we believe it's the most sophisticated corporate development team in our space precisely to address this upcoming window.

Jason John: Yeah.

Jason Chung: That's great, Tyler. I appreciate that.

Speaker Change: That's great color appreciate that and going back to the engineering business for just a moment how should we think about engineering revenues once the supply chain issues are resolved later this year.

Speaker Change: Especially given the growing backlog you guys are experiencing should we expect the run rate to go back in line with what we saw last year should we experience more of a elevated level, especially given the growing demand for that business.

Speaker Change: Okay.

Jason Les: Mike, I would say you can think about it just following the historical performance for now. I think the main thing that we need to work on to scale this business is increasing the capacity of that engineering segment. That will really be the driver of improved financial performance there. The demand is enormous, and that has not been an issue for us.

Mike Colnessy: And, you know, going back to the engineering business for just a moment, how should we think about engineering revenues once these supply chain issues are resolved later this year, especially given the growing backlog you guys are experiencing? Should we expect the run rate to go back in line with what we saw last year? Or should we experience more of an elevated level, especially given the growing demand for that business? Like, I would say...

Speaker Change: Mike I would say you can you can think about it.

Mike: Just following historical.

Mike: Performance for now I think the main thing that we need to work on to scale. This business is increasing the capacity of that engineered segment that that will really be the driver of improved financial performance there.

Darren Ahti: It's really expanding our manufacturing warehouse capacity. We're working on that, but I wouldn't guide you towards expecting a higher increase for that at that time. It's something I think we can touch on at our next earnings call. Great. We'll take our next call from Darren Ahti from Roth MKM. Darren. Yeah, thanks, questions, if I may.

Mike: But the demand.

Mike: It is enormous that that had not been an issue for us it's really expanding our manufacturing warehouse capacity. So we're working on that but I wouldn't guide towards expecting a higher increase for that at that time, but it's something I think we could touch on at our next earnings call.

Speaker Change: Great we'll take our next call from Darren <unk> from Roth <unk> Darrin.

Darren Ahti: Great. We'll take our next call from Darren Ahti from Roth MKM. Darren. Yeah, thanks.

Darren: Yes. Thanks.

Darren: Two questions if I may.

Darren: The machines are you going to replace in Rockdale I think in the release you said.

Darren: Are those going to start with second quarter could you just kind of speak to the cadence of how those are going to be added and then.

Darren: Secondly, on the hosting capacity any kind of sense on.

Darren: Resolution there at least what you can publicly say in terms of taking.

Darren: <unk> taken kind of shift some of that to self mining in the future. Thanks.

Speaker Change: Yes, Darrin so for the hash rate.

Jason Les: Yeah, Darren, so for the hashrate replacement and growth at Rockville, so this is with the M60 series, the latest generation of micro-BT miners that we purchased. We're receiving those this month, and we've been preparing to deploy those miners. We're really excited about this enhancement and growth. We've tested these M60 miners, M50 miners, and other micro-BT miners extensively before making this decision. We're really impressed with the performance that we saw, the resilience under tougher operating conditions, so we're really excited about the results that we think we're going to see from those miners as we deploy them over the next couple months here.

Darren: Replacement and growth at Rockdale.

Darren: This is with the M 60 series latest generation micro V team monitors that we purchased were receiving those this month, we've been preparing to deploy those miners.

Darren: I would say.

Darrin: We expect this to begin at the end of May continue through June and July I think the bulk of the deployments will happen during June but over about the eight weeks or so starting later this month is how we foresee those deployments.

Darrin: And that juul.

Darrin: Replace these problematic machines, which will increase the operating performance in our existing facility and then we are growing our hatch rate as well so that'll take rockdale from the $12 four in cash now to a little over 50, that's the hash when all of this might have deployed we're really excited about the enhancement and growth.

Darrin: We've tested the <unk> miners.

Darrin: Or.

Darrin: 50 miners and other macro became minor considerably before making this decision we were really impressed with the performance that we saw the resilience under tougher operating conditions. So we're really excited about the results that we did see from those miners as we deploy them over the next couple of months here.

Jason Les: With respect to the hosting-related litigation, you know, litigation is always unpredictable. I can't really give guidance on that. We are certainly putting a lot of effort and resources toward that litigation, and I think we'll just have to see how it goes.

Darrin: With respect to the hosting related litigation litigation is always unpredictable.

Speaker Change: Can't really give guidance on that.

Darrin: We are certainly putting a lot of effort and resources towards that litigation.

Darrin: And I think we'll just have to see how it goes from here.

Speaker Change: Great. Thank you.

Speaker Change: Thanks, Dan.

Speaker Change: Yeah.

Darrin: Yeah.

Martin Toner: Our next question comes from Martin Toner at ATB Capital. Martin.

Darrin: Our next question comes from Martin <unk> at ATB capital Martin.

Jason Les: Thanks very much and congratulations on some great progress here, particularly with the data center hosting. Can you talk to the drivers of sequentially higher SG&A in the quarter and maybe what we should be thinking about for a run rate going forward?

Martin: Thanks, very much and congrats on the great progress here.

Martin: Particularly but the data center hosting can you talk to the drivers of sequentially higher SG&A in the quarter and maybe what we should be thinking about for a run rate going forward.

Speaker Change: Sure so.

Jason Les: Sure, so... Two things here. One, like I just touched on, we've had an increased level of legal litigation expense as we go through the litigation process with these hosting customers. This is not a type of expense that should continue long term, but it's one we're continuing right now. The other point that I would touch on is that, as mentioned in the presentation, we've eliminated the data center hosting segment.

Martin: Two things here one I got just touched on we've had increased level of legal litigation expense as we go through the litigation process with these hosting customers. This is not a type of expense that should continue long term, but it's one we're continuing right now.

Martin: The other point that I would touch on is.

Martin: As mentioned in the presentation, we've eliminated the data center hosting segment as a result of eliminating that segment. Some of the costs that were previously in cost of revenues for that segment have now gone into SG&A.

Jason Les: As a result of eliminating that segment, some of the costs that were previously in the cost of revenues for that segment have now gone into SG&A. The final point I'll leave you with on the commentary there is... We're building a large business. We have built this business into what we are now growing into. So, we have built a business for, you know, 30x the hash and beyond. And now, with what we're accomplishing, of course, in Canada and the results we're seeing we're starting to see there, we're growing into that newer size.

Martin: The final point I'll leave you with some commentary there is.

Speaker Change: Work.

Speaker Change: Building, a large business here.

Speaker Change: We have built this business into what we now are growing into so we have built a business for 30 extra hash and beyond and now with what we're accomplishing and of course, the Cana and the results. We're seeing we're starting to see there we're growing into that newer size.

Jason Les: So, as far as what SG&A can look like going forward, I think you can expect $22 to $25 million a quarter in cash expenses. I think that's a good estimate that we can give right now, and the other is the legal and litigation expenses that are not ongoing and continuous fall off. Hopefully, we will be able to improve that number.

Speaker Change: So.

Speaker Change: As far as what SG&A can look like going forward.

Speaker Change: I think you can expect.

Speaker Change: 22% to $25 million.

Speaker Change: And cash expenses.

Speaker Change: I think that's a good estimate that we can give right now.

Speaker Change:

Speaker Change: Legal and litigation expenses that are not ongoing continuous falloff, hopefully, we won't be able to improve that number.

Jason Les: Great, thank you very much. Can you talk a little bit about the curtailment revenue in the quarter? Any puts and takes that are noteworthy? And then, have there been any changes to the power strategy since Analyst Day a few, less than a month ago?

Speaker Change: Great. Thank you very much.

Speaker Change: Talk a little bit about the curtailed that revenue in the quarter.

Speaker Change: Any puts and takes that are noteworthy and then have there been any changes to the power strategy.

Speaker Change: To stay a few or less lucrative.

Speaker Change: So most of the power strategy results are really Q3 weighted we see some every quarter, but most of them really come in the third quarter and the summer months and of course at the end of the second quarter, we get some of that in June.

Jason Les: So most of the power strategy results are really Q3 weighted. We see some every quarter, but most of them really come in the third quarter during the summer months. And of course, at the end of the second quarter, we get some of that in June. So the approximately 5 million that you see from the first quarter, that's us really taking advantage of just limited opportunities that have come up in that corner during that quarter and the ancillary services revenue that we always participate in.

Speaker Change: So the five approximately 5 million do you see from the first quarter, that's really taken advantages.

Speaker Change: I've, just limited opportunities that come up in that corner during that quarter and the ancillary services.

Speaker Change: Revenue that we always participate in.

Jason Les: So, how it plays out this summer and, you know, mainly Q3 coming up here, it is hard to predict. It's going to be based on external factors like weather and generation performance that we cannot control. However, because we have this 345 megawatts of fixed price power, because we have these blocks 24-7, and because of what we've learned in the power strategy that we've developed, we are in a really good position to act on opportunities when they occur here.

Speaker Change: So how it plays out.

Speaker Change: In this summer and mainly Q3 coming up here.

Speaker Change: It is hard to predict it's going to be based on external factors like weather and generation performance that we cannot control how's.

Speaker Change: However.

Speaker Change: Because we have this 345 megawatts of fixed price power because we have these blocks 24, seven and because of what we've learned when the power strategy that we've developed we are in a really good position to act on the opportunities when they occur here. So that 345 megawatts that is at Rockdale So will be.

Jason Les: So that 345 megawatts, that is at Rockdale. So we'll be executing our power strategy at Rockdale, selling power when the spot price of power is exceeding Bitcoin mining revenue. And then over at Corsicana, we are beginning unhedged, and we'll just be responding to the spot prices of power as they occur there, which, you know, also gives us the benefit of capturing those very low-priced or negative-priced hours when they occur as well.

Speaker Change: Executing on our power strategy at Rockville, selling power windows.

Speaker Change: With that spot price of power is exceeding their combined revenue and then over a course of Canada. We are beginning unhedged and we'll just be responding to that.

Speaker Change: Spot prices in the power as they occur.

Speaker Change: It also gives us the benefit of capturing those very low priced or negative priced hours when they occur as well.

Speaker Change: Yeah.

Speaker Change: That's great. Thank you promotion Thats all for me.

Jason Les: That's great. Thank you very much, and that's all for me.

Speaker Change: Alright, thank you.

Speaker Change: Yeah.

Speaker Change: Great.

Reggie Smith: Our next question comes from Reggie Smith at J.P. Morgan. Reggie?

Speaker Change: Next question comes from Reggie Smith at Jpmorgan Reggie.

Reggie Smith: Hey, good morning, Thanks for taking the question.

Reggie Smith: Hey, good morning. And thanks for taking the time to ask the question. I appreciate the disclosure on slide nine, but I'm still not all the way clear on, I guess, the drivers of the sequential increase and your cost to mine. I'm looking at the network difficulty component, and it seems rather large in relation to the 4P number. Maybe a little color on those two components, that and the other cost, and how much of that you think is kind of recurring versus one-time-ish. Any color you can provide there to just kind of bridge, help bridge that increase in cost to mine would be helpful. And then I have one follow-up question. Thank you.

Reggie Smith: I appreciate the disclosure on slide nine I'm still not all the way clear on I guess, the drivers of the sequential increase and a.

Reggie Smith: And your cost to mine.

Reggie Smith: I'm looking at the network difficulty component.

Reggie Smith: And it seems rather large in relation to 2014 of them, maybe a little color.

Reggie Smith: On those two components to that and the other costs and how much of that you think is the it's.

Reggie Smith: It's kind of recurring versus one time is any color you can provide there can you just kind of bridge outbreaks that increase in cost of mine will be helpful and I have one follow up question. Thank you.

Jason Les: Sure. Thanks, Reggie.

Speaker Change: Sure. Thanks, Rajeev so far.

unknown: First as you noted there was about a 20% increase in network difficulty at quarter over quarter. So that accounted for about 43, 44 400 on a cost per point basis increase.

Jason Les: So, first, as you noted, there was about a 20% increase in network difficulty quarter over quarter. So, that accounted for about a 4,400 cost per coin basis increase in our cost per coin. Other costs increased by about $5,000 per coin for the quarter. So, what is driving that is going to be the elimination of the data center hosting big business and, therefore, the consolidation of some of those expenses that were previously in that segment now in the Bitcoin mining sector.

Reggie Smith: And our cost per coin.

Speaker Change: Other costs increased by about $5 million I'm, sorry, $5000 per coin for the quarter. So what is driving that it was going to be the elimination of the data center hosting big business and therefore, the consolidation of some of those expenses that were previously in that segment now in bitcoin.

Reggie Smith: Mining segment. So some examples of these costs include things like minor repair.

Jason Les: So, some examples of these costs include things like miner repair. Miner repair is slightly elevated at this time, so we hope, especially when we are replacing all our problematic miners, that this cost is going to go down and not continue, at least in this quantity. So, what I would say is when you look at, on slide nine, our cost per coin, including $6,300 per coin and other costs, I think the best we can do at this time is guide to that approximately continuing. Of course, the halving has an impact on that, but that notwithstanding, other costs, which

Reggie Smith: Minor repair is.

Reggie Smith: Slightly elevated at this time, so we hope, especially when we are replacing all of our problematic minor, but this cost is going to go down and <unk>.

Reggie Smith: Not continue at least at this at this.

Reggie Smith: Quantity.

Reggie Smith: So I, what I would say that when you look at on slide nine our cost per coin, including 6300 per coin and other costs I think the best we can do at this time.

Reggie Smith: Guide to about that approximately continuing of course, the having has an impact on that but that notwithstanding other costs, which will probably continue at the same rate, but we are going to hope to decrease those by having a lot less minor repairs going forward.

Speaker Change: Got it and you say minor repairs.

Jason Les: Got it. And you say minor repairs. You're not repairing the equipment from your hosting partners now, are you? No, sorry, let me clarify.

Speaker Change: Repairing the equipment from your hosting partners now are you.

Speaker Change: Oh, sorry, let me clarify I guess, the comments, where we're blended there I'm trying to figure out like how much of it was.

Speaker Change: Kind of the I guess, the overhead drag from from the hosting business versus some of the other things.

Speaker Change: Yes, So let me clarify minor repair costs have always been in our cost of goods for self mining so.

Jason Les: Yes, so let me clarify. Minor repair costs have always been in the cost of goods for self-mining. So, that is not a new experience.

Speaker Change: That that is not that is not a new expense I would say that the minor repair costs have been elevated in both Q4 and then now in Q1 2024, I'm sorry, Q4 2023 in Q1 of 2024.

Jason Les: I would say that the minor repair costs have been elevated in both Q4 and then now in Q1 of 2024, sorry, Q4 of 2023 and Q1 of 2024. And we expect that those are going to go up now going forward. And these are third-party repair costs. These are the costs that we are paying to third-party vendors for repairing our equipment. The other cost increased, quarter over quarter, by approximately $5,000 per coin. That's largely these other expenses that were previously included in the data center hosting cost of revenue that is now in Bitcoin mining cost of revenue. So some examples of this would be some direct labor expenses, some land lease and property taxes, and the network costs and other utility expenses that we incur.

Speaker Change: And we expect that those are going to go now going forward and these are third party repair costs. These are the costs that we're paying to third party vendors for repairing our miners the other cost increase quarter over quarter.

Speaker Change: Approximately $5000 per coin that's largely these other expenses that were previously included in <unk>.

Speaker Change: Data center hosting cost of revenue that is now in bitcoin mining cost of revenue. So some examples of this would be some direct labor expenses.

Speaker Change: Land lease and property taxes, and the network costs and other utility expenses that we incurred.

Reggie Smith: That makes sense. And then I guess one big picture question for you, you know, appreciate the disclosure on kind of the 100x a hash. As you think about growth beyond Corsicana, does, you know, does that look different in terms of the size of the facility? Like, is Corsicana like the last big facility? Do you think there'll be smaller ones going forward? And I ask that just in light of all of the AI interest and power assets and things like that. Like, how are you thinking about that next 40x a hash of capacity kind of beyond Corsica? Like, what could that look like?

Speaker Change: Okay that makes sense and then I guess, one big picture question for you.

Speaker Change: Yeah I appreciate the disclosure on kind of 100 X. It has as you think about growth beyond of course the economy.

Speaker Change: Yes.

Speaker Change: Does that look different in terms of the size of our facility like of course kind of like the last final Big Big facility do you think that the smaller ones going forward and I ask that just in light of all of the AI interests and power assets and things like that I guess, how are you thinking about like that next 40 X. It has.

Speaker Change: Of.

Speaker Change: And he kind of beyond of course, it kind of like what could that look like.

Jason Les: Yeah, I think that what we have at Corsicana is very valuable because it is probably the last one gigawatt site, probably the only one gigawatt site that exists, and probably the last one that will ever be approved. Access to power is going to be a critical constraint for Bitcoin miners and these other industries scaling up going forward. So I think what you should expect to see from us is capturing smaller size opportunities.

Speaker Change: Yeah, I think that while we have of course, Canada is very valuable because it is probably the last one gigawatt site, probably the only one gigawatt side that exist in probably the last one that'll ever be approved.

Speaker Change: Improved access to power is going to be a critical constraint or bitcoin miners and these other industry scaling up going forward. So I think what you should expect to see from us is capturing smaller sized opportunities.

Speaker Change: We're not opposed to doing smaller sites with merely been acting on b.

Jason Les: We're not opposed to doing smaller sites. We've merely been acting on the most frictionless growth path that's been in front of us, which has been these two sites with a large capacity. We're open to new sites and new opportunities on all sides. And we're working on that quite a bit right now. So we look forward to sharing more results as those ideas become more actionable.

Speaker Change: Most frictionless growth path, that's been in front of US which has been these two sides of the large capacity.

Speaker Change: We're open to new sites and new opportunities of all sizes and we're working on that quite a bit right. Now. So we'll look forward to sharing more results as those ideas become more actionable going forward.

Reggie Smith: And I guess that could be outside of Texas and maybe even the United States, or are you still trying to think about staying in Texas?

Speaker Change: And I guess that could be outside of Texas, and maybe even in the United States are you still trying to think about staying in Texas.

Jason Les: No, we are open to operating, I would say, in the United States and North America. You know, we've operated in Texas because that has been the easiest pathway to growth, and we really like the power market here. We're able to really achieve this industry-leading low cost of power here, which is just so critical for Bitcoin mining. That doesn't mean those opportunities don't exist elsewhere, though, so we look at opportunities all over the country all the time.

Speaker Change: No we are open to operating.

Speaker Change: I would say in the United States and North America.

Speaker Change: We operate in Texas, because that has been the easiest pathway to growth and we really like the power market here, we're able to really achieve this industry, leading low cost of power here, which is just so critical in breakpoint mining that doesn't mean those opportunities doesn't don't exist elsewhere, though so we look at opportunities all over the country all the time.

Jason Les: International opportunities, I think, you know, to be determined. We're seeing some interesting things in South America and elsewhere, but, you know, there's other considerations always besides power costs, so we look at a lot of things, but I think you can expect to see our growth in North America in the foreseeable future.

Speaker Change: <unk>.

Speaker Change: International opportunities I think to me determined we're seeing some interesting things in South America and elsewhere.

Speaker Change: But then theres other considerations always just besides power costs. So we look at a lot of things, but I think you could expect to see our growth in <unk>.

Speaker Change: North America in the foreseeable future.

Speaker Change: Perfect. Thanks, guys nice poverty.

Lucas Pipes: Perfect. Thanks. Thanks, guys. It's nice talking to you.

Speaker Change: Alright, Thank you rajeev.

Lucas Pipes: Our next call comes from Lucas Pipes at B-Riley Securities. Lucas?

Speaker Change: Our next call comes from Lucas pipes of B Riley Securities Lucas.

Lucas Pipes: Thanks, very much Phil good morning, everyone. So my first question is back on the on the hosting side.

Jason Les: Thanks very much, Phil. Good morning, everyone. So my first question is back on the hosting side. And if we were to be on site today, would there still be machines from your former host or customers, or have they been removed? Thank you very much.

Speaker Change: If if if.

Lucas Pipes: If we were to be on site today.

Lucas Pipes: There is still be.

Lucas Pipes: Machines from from your former host or customers or where have they been removed. Thank you very much.

Jason Les: Yeah, Lucas, so while we terminated our last two remaining hosting agreements towards the end of 2023, one of those customers still remains operating on site. So for the first quarter, that accounted for about $3.2 million in revenue that was included in our Bitcoin mining revenue. And then their power cost of about $4.5 million was included in our cost of revenues for Bitcoin mining. So you would see that one remaining customer there operating while we continue through the legal process here and try to get to a resolution.

Phil Mcpherson: Yeah, Lucas so while we terminated our last two remaining hosting agreement in towards the end of 2023.

Speaker Change: One of those customers still remain operating on site. So for the first quarter that accounted for about $3 2 million in revenue that was included in our revenue and then the power cost of about $4 $5 million was included in our cost of revenues for bitcoin mining. So you would see that one remaining customer there.

Lucas Pipes: Are performing.

Lucas Pipes: I'm sorry operating.

Lucas Pipes: While we continue through the legal process here and try to get to a resolution.

Lucas Pipes: Yeah.

Lucas Pipes: and the other one is fully out of your facility. That's correct. That's correct. Thank you. And kind of taking a step back, would you consider going back into the hosting business, or is the lesson learned here, never again?

Speaker Change: And the other one is fully out of your facilities at this point that's correct that's correct.

Jason Les: Yeah, I think that's the lesson learned here, maybe said a little more strongly than I would say it.

Speaker Change: Thank you and and kind of taking a step back would you consider going back into the hosting business or is the lesson learned here never again.

Speaker Change: Yeah.

Speaker Change: That's the lesson learned here, maybe I'll spend a little more strongly than I would say I think we have seen the best use of its infrastructure.

Speaker Change: Building, new infrastructure is for growing our self mining operations.

Lucas Pipes: I think we have seen the best use of this infrastructure in building new infrastructure is for growing our self-mining operations. We want to get maximum exposure to Bitcoin. We want to leverage our efficient cost of production over the widest scale possible, and I think expanding the hosting business really just takes away that valuable infrastructure pipeline, which I think generates results and better grows our business. It's more what our shareholders need. So, we are not looking to grow the hosting business any further.

Speaker Change: We want to get maximum exposure to bitcoin, we want to leverage our efficient cost of production over the wider scale possible and I think expanding the hosting business really just takes away that valuable infrastructure pipeline, which I think generates the results.

Speaker Change: Better grows our business with more what our shareholders are looking for so we are not looking to grow the hosting business any further.

Jason Chung: And then, just to round this out, when you look at M&A, you mentioned earlier that you're inquisitive, you built out a sophisticated corporate development team, would you rule out any targets that have posting agreements today, and more generally, what would the ideal target look like? Thank you.

Speaker Change: Very helpful. Thank you and then.

Speaker Change: Just to round this out when you look at M&A you mentioned earlier.

Speaker Change: You're inquisitive she built out up.

Speaker Change: Sophisticated corporate development team.

Speaker Change: Would you rule out.

Speaker Change: Any targets that have posting agreements today.

Speaker Change: And more generally what would the ideal target look like thank you.

Jason Chung: Sure, let me turn that back to Jason Chung, our Head of Proof Development.

Speaker Change: Sure, let me turn that back to Jason Chung, our head of Brooklyn.

Jason Chung: Thank you, Jason and thanks for the question Lucas.

Lucas Pipes: Thank you, Jason, and thanks for the question, Lucas. We, in the M&A world, see a wide variety of opportunities, and it's rare to see a target that 100% encapsulates everything you're looking for. So sometimes there are situations where there's an opportunity to make a deal, but it might come with some amount of hosting, for example, or other factors which may not completely tie to our overall strategy. And that's something that we have to take into account when we evaluate some of these opportunities in the market.

Speaker Change: We in the M&A World.

Speaker Change: We see a wide variety of opportunities.

Jason Chung: And it's rare to see a target that.

Jason Chung: 100% of cap rate encapsulates everything youre looking for so.

Speaker Change: So sometimes there are situations where.

Theres, an opportunity to make a deal but it might come with <unk>.

Operator: Some amount of hosting for example, or other factors, which may not completely tied to our overall strategy and.

Speaker Change: And that's something that we have to take into account when we evaluate some of these these opportunities in the market.

Lucas Pipes: So I'd say that, you know, as long as an opportunity is able to check most of the financial and strategic and operational boxes, the criteria that we have, and we'll consider it. That being said, at the same time, we are incredibly blessed at Riot to have full control over.

Speaker Change: So I'd say as long as the opportunity is able to check most of.

Speaker Change: Most of the financial and strategic and operational boxes, the criteria that we have.

Speaker Change: We'll consider it.

Speaker Change: That being said at the same time, we are incredibly blessed at riot.

Jason Les: You have an organic growth opportunity.

Jason Chung: Unlike a unlike others in this space and so ultimately we have to evaluate all these opportunities relative to our ability to control our own destiny, CT scanner and develop our pipeline.

Jason Les: Full controller for what that looks like.

Speaker Change: Thank you and and in terms of size. What do you think is that is there a sweet spot either in terms of value dollars or kind of megawatts of capacity.

Jason Chung: Thank you, and in terms of size, what do you think? Is there a sweet spot, either in terms of value, dollars, or megawatts of capacity?

Lucas Pipes: I wouldn't say there's a specific sweet spot in size, but we do look at opportunities across the spectrum. [inaudible] I really appreciate it all.

Jason Chung: I wouldn't say, there's a specific.

Jason Les: Sweet spot in size, we do look at opportunities across the spectrum.

Speaker Change: Obviously as a large scale miner, we like looking at large scale opportunities that can move the needle, but I think there are some interesting.

Speaker Change: Interesting businesses that arent necessarily large scale that may be a little less appreciated by the market or kind of fly under the radar and so there is some interesting deals that can be done there as well.

Speaker Change: Really appreciate all the color and comments.

Lucas Pipes: I really appreciate all the color and time. [inaudible] Thank you, Lucas. Okay, we've got time for one more question, our last question.

Speaker Change: Best of luck.

Speaker Change: Thank you Lucas.

Speaker Change: Okay. We've got time for one more question. Our last question is going to come from or Owen record at Northland Securities.

Owen Rickard: Okay, we've got time for one more question. Our last question is gonna come from Owen Rickard at Northland Securities. Owen.

Speaker Change: Yeah.

Owen Rickard: Hey, guys. Thanks for taking my question I'm on for Mike Grondahl today. So just quickly I guess, what's your confidence level on getting to the 31 <unk> by the end of the year.

Owen Rickard: Hey guys, thanks for taking the time out of your day to watch this video. I hope you enjoyed it. I'll see you in the next one.

Owen Rickard: And what are some of the challenges you might face or you are currently facing to get there.

Owen Rickard: Thanks for the question.

Jason Les: Thanks for the question. I think we feel pretty confident about our ability to meet that growth target. We're taking things step by step here. I would say a lesson that we learned from Rockdale was rushing, you know, too fast to get every miner online as quickly as possible, and you kind of often miss some steps that you have to come back and address later. So we're very incrementally approaching the development year. The challenges are really just kind of the small things that will come up in any large development.

Owen Rickard: I think we feel pretty confident about our ability to execute on that growth target. We're taking things step by step here I would say a lesson that we learned from Rockdale was rushing to fast again every minor online as quickly as possible.

Jason Les: Can oftentimes Miss some steps that you have to come back and address later, so we're very incrementally approaching the development here.

Jason Les: The big milestone was energizing that substation that was huge we're very proud of that and now its a matter of just incrementally putting up these buildings deploying the immersion equipment and putting the miners and going from there. So we're making these deployment step by step and you can expect to see this continue over the rest of the year.

Jason Les: You know, as you build and scale out more, you'll incur different problems, like, hey, this electrical switch needs something, this networking thing needs resolution here, or, you know, this immersion system needs to be altered quite a bit. None of them are critical or big roadblocks.

Jason Les: The challenges are really just kind of the small things that will come up in any large development as you build scale up more.

Jason Les: You'll have heard different problems like Hey, you know the best electrical switch switch need something this networking things resolution here or.

Jason Les: This immersion system needs to be altered quite a bit none of them are.

Jason Les: Coal or big roadblocks, there just the kind of punches that you rolled weapons.

Jason Les: They're just the kind of punches that you roll with in this business, and through our experience in building this infrastructure at scale, we've become quite good at identifying small issues, resolving them, and then just continuing to move forward. So to wrap that up, we're very confident about our 31x hash goal, and we are just marching forward on that for the next seven months of the year. Awesome, thanks a ton guys

Jason Les: Through our experience in building this infrastructure at scale, we've become quite good at identifying small issues resolving on and then just continuing to report so it's kind of to wrap that up.

Jason Les: We're very confident about our 31, that's high school and we are just margin board on that for the next seven months of the year.

Speaker Change: Awesome, Thanks for time guys.

Jason Les: Okay.

Speaker Change: That concludes our Q&A. Thank you everyone for listening into our presentation and for the questions from our analysts.

Phil Mcpherson: Okay, that concludes our Q&A. Thank you everyone for listening to our presentation and for the questions from our analysts. Very excited about what we are executing on Corsicana. We'll be providing updates as we always do on a monthly basis going forward and look forward to speaking with everyone and sharing more results after the end of Q2 and the Q2 results in August. So with that, thank you everyone. Have a good day.

Phil Mcpherson: Very excited about what we are executing on a corsicana, we'll be providing updates as we always do on a monthly basis going forward and look forward to speaking with everyone and sharing more results. After the end of Q2 results in August. So thank you everyone have a good day.

Speaker Change: This concludes today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation and have a wonderful day.

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

Operator: Okay.

Operator: [music].

Operator: Okay.

Operator: [music].