Q2 2024 Riot Platforms Inc Earnings Call
Greetings and welcome to REIT platform second quarter 2020, full 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.
Speaker Change: If anyone should require operator assistance during the conference.
Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host Phil Mcpherson, Vice President of capital markets and Investor Relations. Thank you you may begin.
Speaker Change: Okay.
Speaker Change: Thank you vehicle.
Philip James McPherson: Good afternoon, and welcome to Ryder platforms second quarter 2024 earnings Conference call. My name is Phil Mcpherson and joining me on today's call from Ryan or Jason less CEO, Collin <unk>, CFO, and Jason Chung Executive Vice President and head of corporate development and strategy.
On the right.
Speaker Change: The Investor Relations website, you can find our second quarter 2024 earnings press release and accompanying earnings presentation, which are intended to supplement todays prepared remarks, and which includes discussion of certain non-GAAP items non-GAAP financial measures provided should not be considered as a substitute for or superior to.
The measures of financial performance prepared in accordance with GAAP and are included as additional clarifying items to aid investors in further understanding the company's second 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 and comments and responses.
Made during today's call and in the risk factors section of our Form 10-K, and Form 10-Q, including for the quarter ended June 32024, which will be filed today. After this call as.
As well as other filings with the Securities and Exchange Commission with that I will now turn the call over to Jason less CEO a variety of platforms.
Thank you Phil and good afternoon, everyone.
Why its primary strategic focus has been on developing a leading vertically integrated bitcoin mining company built on the three key pillars of one developing and owning operation of significant scale to being a low cost producer of bitcoin.
Three building a balance sheet strength.
Yeah.
During the second quarter of 2024, we've demonstrated success at all three of these pillars right successfully energized our corsicana facility, increasing total deployed high shrink quarter over quarter by 77% from <unk> to 'twenty, two extra hash and exceeding our quarter end target of 21 extra house.
We also raised our 'twenty 'twenty four deployed high straight target from 31 extra has to 36 out of the house and our 2025 deployed house target for 40 extra hashed to 56 extra hash. These growth plans remain fully funded as a result of our continued focus on maintaining a strong balance sheet.
The second quarter of 2024 was the first quarter, a big point production, which predominantly occurred following the having event, which occurred in late April and which led to a reduction in the big point block subsidy from $6 two five to $3 125 bitcoin per block.
Speaker Change: Additionally, global highest rate grew by 6% quarter over quarter.
Both of these events created bearish headwinds for bitcoin minors when it comes to the cost of mining. Despite these events why it's direct cost of mine in the second quarter remained extremely competitive and was well below the average price per bitcoin during the quarter.
These outstanding results were aided by our unique power strategy, which generated $13 9 million empower credits during the quarter, resulting in an all in cost of power of 2.7 cents per kilowatt hour during the quarter, while also supporting the Texas grid during times of disruption in supply and demand.
Following the close of the second quarter of 2024 on July 23rd right announced the acquisition of block mining a privately held bitcoin minor operating in Kentucky.
This acquisition immediately add 16 megawatts of operating capacity with the potential to quickly expand to 110 megawatts. This year by leveraging existing infrastructure and a pipeline to build to over 300 megawatts in total in Kentucky. This.
Speaker Change: <unk> adds approximately 16 Xtra has a total heartbreak capacity and provides us with a clearly identified growth path to two gigawatts of potentially accessible power and 75 extra hash of potential heartbreak deployed.
We remain focused on the growth and enhancement of our bitcoin mining business right. Its focus is maximizing bitcoin mining results and our strategy is enabling us to execute on this at an unprecedented scale.
I'd now like to turn the call over to colony CFO of REIT platforms.
Yeah.
Thank you Jason.
I'm excited to present <unk> financial results for the second quarter of 'twenty 'twenty four.
During which <unk> achieved a number of key milestones.
Our ease of reference slide five presents a snapshot of key financial and operating metrics for the second quarter of 2024.
Well, let's go over some highlights on the following pages.
Right owns and operates the largest dedicated bitcoin mining facility in the world. The Rockdale facility, where we continued to deploy miners and expand our self mining capacity during the second quarter in.
In addition, during this past quarter right successfully energized, our new Corsicana facility, which when fully developed will supplant the rockdale facility as the largest dedicated they're quite mining facility in the world.
As a result of successful <unk> and developments of our Corsicana facility and ongoing development at our Rockville facility right ended the second quarter with an installed fast rate with 22 actually has a 106% increase relative to the second quarter of 2023 and exceeding our.
Prior guidance on 'twenty one access.
Alongside additional growth in Kentucky, resulting from our acquisition of block block mining, we now anticipate achieving a total self mining cost rate capacity of 36 <unk> by the end of 'twenty 'twenty four.
Up from our prior guidance of 31 extra hatch.
During the quarter right mind, 844, bitcoin, which represents a decrease of 52% from about 1775 bitcoin we mined during the second quarter of 2023.
This decrease was primarily driven by the blocks subsidy, having event, which occurred in April 2024, and a significant increase in the bitcoin network difficulty, which increased by 68% from the second quarter of 2023.
However, driven by the significant growth in our highest rate capacity expected through the remainder of the year, we anticipate producing more bitcoin per day by the end of 2024 than we did in the first quarter of 2024, having notwithstanding.
Right ended the second quarter of 2024, with 9334, bitcoin and increase of 28% relative to the 7265 decline that we held at the end of the second quarter of 2023.
<unk> continued to retain 100% of all bitcoin produced in the second quarter.
In the second quarter of 2024, right reported total revenue of $70 million as compared to $76 7 million for the second quarter, 2023% to 9% decrease year over year.
This decrease was primarily driven by lower revenue at the company's Engineering Division.
During the quarter bright reclassified third party hosting revenues and costs into other from Bitcoin mining as previously reported in the first quarter of 2024.
non-GAAP gross profit for the quarter was $30 3 million as compared to non-GAAP gross profit of $26 2 million in the second quarter of 2023.
Speaker Change: non-GAAP adjusted EBITDA for the quarter was a loss of $75 2 million as compared to non-GAAP adjusted EBITDA of $24 3 million in the second quarter of 2023.
Right its adoption of Fasb's final standard on crypto assets issued in December 2023.
<unk>.
Right now recognizes it's bitcoin held at fair value and with it changes in fair value now recognized in income.
As a reference the big one price at the end of the first quarter of 2024 was 71 $333 and the price at the end of the second quarter was $62678. This resulted in a mark to market downward.
Adjustments of $76 4 million in the second quarter.
Net loss for the quarter was $84 4 million or <unk> 32 per share compared to net loss of 27 4 million or <unk> 16 per share for the same period in 2023, which included a loss of loss from change in the fair value of the coin held equal to $76.
$4 million.
Noncash stock based compensation expense of 32 million and depreciation and amortization of $37 3 million.
As a reminder, beginning in the first quarter of 2024, we adjusted our depreciation schedule for mining hardware from a two year two or three year schedule based on our evaluation of market practice and our own operational history.
For the second quarter of 2024, Bitcoin mining revenue totaled $55 8, million% to 12% increase relative to second quarter 2023, Bitcoin mining revenue of $49 7 million.
Bitcoin mining cost of revenue primarily consists of direct production costs of bitcoin mining operations, including electricity.
Labor and insurance, but excluding depreciation and amortization.
Take one mining revenue in excess of bitcoin mining cost of revenue for the quarter was $25 million, representing a margin of 37% as compared to $26 1 million or a margin of 52% in the second quarter of 2023.
This decrease in margin was primarily driven by the having events and a significant increase in global hash rate quarter over quarter.
If power credits were directly allocated to bitcoin mining cost of revenue bitcoin mining cost of revenue would have decreased by $13 9 million, increasing our bitcoin mining margin to $34 4 million.
462% on a non-GAAP basis.
In spite of the global network hash rate increasing from an average of 568 extra cash in the first quarter 2024 to 604 extra hash a 6% increase and the big one having events in April 2024, right cost reduce the appointed circa.
Quarter, only increased 9% on a per client basis and costs on a dollar basis actually decreased to $30 5 million from $36 million in the third and the first quarter of 2024.
Direct cost of mine this quarter totaled $25 $327 per bitcoin.
Direct power costs amounted to $14890 or 59% of total direct cost to mine a bitcoin.
While direct non power costs, which include direct labor minor insurance minor minor related equipment repairs land lease and related property taxes network costs and other utility expenses totaled $10437 or 41% per bitcoin.
As previously mentioned the having in an increasingly global network hash rate and an accompanying increase in network difficulty were the primary drivers behind the slight increase in rights average direct cost to mine the coin in the second quarter.
This was offset by an increase in power credits as compared to the first quarter 'twenty 'twenty four.
Brian its engineering business.
Carried on through right wholly owned subsidiary Esf's Medtronic reported revenue of $9 6 million in the second quarter of 2024 as compared to $19 3 million for the same three month period in 2023, a decrease of $9 7 million.
This decrease was primarily attributable to supply chain constraints, resulting in decreased receipts of materials.
<unk> the completion of certain custom products and therefore, the recognized the recognition of revenue.
Our custom electrical products, such as switch gear and power distribution centers are used as important components and data center development and in power generation and distribution facilities.
There has been increased demand for these products due to the continued increase in data center construction by developers as well as the continually increasing worldwide demand for power.
Engineering gross profit for the quarter was $1 4 million as compared to a gross profit of $1 1 million for the second quarter of 2023.
We anticipate a strong second half of 2024 for our engineering business driven by continued growth in demand primarily from data center customers and the completion of complex legacy projects.
I will now turn the call back over to Jason less.
Thank you Colin.
With riots expansion into Kentucky, we now have access to two gigawatts of total power capacity and are well on our way to securing enough power to achieve our growth target of 100 exit hash of self mining harsh rate.
The pipeline, enabling this growth consisted of 700 megawatts of capacity at our Rockville facility.
One gigawatt at our Corsicana facility and more than 300 megawatts of operating and potential capacity in Kentucky.
Subsequent to the end of the second quarter of 2024.
Right announced the acquisition of block mining, a private big Queen miner with operations in Kentucky.
This acquisition represents why its first major acquisition since 2021 and marks rights first strategic expansion outside of Texas.
The acquisition of block mining immediately increases why attach rate, while significantly expanding our development pipeline of new growth opportunities.
Broadens rides footprint nationally and expands our operations into new mining friendly jurisdictions.
As exposure to new energy markets outside of ERCOT, and which way it can continue to leverage our unique power strategy, while helping to support local grids.
<unk> brings on board, an experienced management team, which will continue to operate existing assets and leverage strong local relationships to drive further growth opportunities.
As a result of our acquisition of block my name.
<unk> gained two additional operating data center facilities in Kentucky.
First Commerce drive, which currently operates 35 megawatts of capacity in Paducah, Kentucky and.
And second Blue Steel, which currently operates 25 megawatts of capacity in nearby Calvert City, Kentucky as well as one Greenfield expansion site also in Kentucky.
Both operating facilities already offer immediate expansion opportunities.
Commerce drive can be potentially expanded up to 100 megawatts leveraging existing infrastructure and bluefield can be expanded up to 55 megawatts.
Additionally, well at present, there was approximately 18 megawatts of capacity being used to host third party miners on site.
Eight megawatts of this capacity is subject to change of control provisions, which right intense exercise while remaining hosting contracts will wind down over the next few quarters further adding to write itself binding capacity.
Together, both operating facilities currently operate one extra hash and self mining and 60 megawatts of power capacity, which we anticipate will be expanded to $4 eight extra hash up self bonding hash rate and 110 megawatts of power capacity by the end of this year.
Coleman Road right, it's new Greenfield development site has the potential to be developed up to 150 megawatts, which would bring the total expansion capacity from our acquisition of block mining up to a total of 305 megawatts, representing a significant portion of the additional capacity we require as we work towards.
Our goal of achieving 100 extra hash of total capacity.
Under riots existing microbial <unk> ASIC minor purchase option, which carries a 16 and a half dollar per carat house price cap.
I can't fully develop these assets for approximately $345 million or 30 million per <unk> has deployed inclusive of total consideration or $21 8 million for excess cash when excluding the purchase consideration.
Speaker Change: This compares favorably with riots historical cost per extra has deployed during phase one at our corsicana facility of approximately $40 million per extra cash.
Speaker Change: The block binding team has a proven track record as a low cost developer of bitcoin mining infrastructure.
And as a low cost bitcoin miner.
Speaker Change: Operating in the mid continent independent system, operator, MISO power grid lock mining had an average power cost over the past year equal to approximately $42 per megawatt hour and an average capex bill the buildout cost of 210000 per megawatt to date across commerce to drive <unk>.
<unk> steel.
Riot has strived to provide clear guidance on our growth plan and just as importantly, where we anticipate this growth will come from.
Speaker Change: We believe that providing visibility on not just the overall growth plan, but also on the specific sources to achieve this growth is a vital element in demonstrating the credibility of any bitcoin miners growth forecast.
Thanks to the groundwork laid out over the past few years as we are focused on developing our corsicana facility. We have the benefit of a clear path to achieve significant growth in the coming years.
This clear path includes growth from additional expansion opportunities at our Rockville facility.
<unk> development at our Corsicana facility.
And immediate and near term added capacity in Kentucky, as well as additional pipeline opportunities as a result of our acquisition of block mining.
Executing on all of these growth opportunities alongside our low cost fixed price purchase options with micro V. G for latest generation Asics will bring right to 75 extra hash and total capacity.
Well on track towards our long term goal of reaching 100 extra hush.
Speaker Change: Yes.
Okay.
Wright's long term purchase order with micro V team continues to improve rightfully deficiency now at 24, and a half jaws portera hash to date, our orders for new miners for micro V. T have been received at or ahead of schedule. As we have now received approximately 77734 miners with the vast majority.
Already already deployed.
As additional new generation miners for microbial <unk> are received and deployed.
It's total fleet efficiency will improve to 21 jaws for Taro has in 2025.
If right execute exercises its long term purchase option of 265066 S. Miners total fleet efficiency would improve to below 20 joules per tower ash.
Riot continues to prioritize maintaining our strong balance sheet with significant financial resources, including cash marketable securities and Bitcoin holdings in order to drive long term value creation for our shareholders.
As a result of our financial position, we can act decisively and continuously scale our business to meet the growing opportunities in the bitcoin mining space.
This balance sheet strength based on $639 million in cash and marketable securities and 9334 Bitcoin enables us to confidently plan our growth funding needs ahead of time in.
In fact growth plans through the end of 2025, calling for 694 million in capital expense expenditures are already fully funded.
Okay.
Speaker Change: <unk> vision is to be the world's leading bitcoin driven infrastructure platform the.
The strategy, we've been executing on over the past several years has now begun bearing the results, which position us to realize this vision.
Through our vertically integrated strategy, we have created an unmatched infrastructure growth pipeline to increase our hatch rate by 193% to 36 extra cash by the end of this year and ultimately to our goal of reaching 100, that's a hash and total self mining hatch rate.
Wow right balance sheet strength underpins, our ability to achieve our growth targets and as a result, our 'twenty 'twenty four and 'twenty twenty-five growth plans are fully funded.
We are incredibly excited about what Ryan is accomplishing this year and we look forward to executing on our stated goals.
Thank you all for listening to our presentation, we would now like to open the call for questions operator.
Thank you.
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One moment, please while we poll for questions.
Yeah.
Yeah.
Yeah.
Yeah.
Okay.
Okay. We will take our first question from Greg Lewis of <unk>, Operator can you open the line.
Yeah.
Gregory Robert Lewis: Yeah. Thank you and good afternoon everybody.
Jason.
Grant: Grant's on getting Corsicana Hartford.
It was a long time coming.
You know I guess, but the question I have is around you know what's next the corsicana. So as you know as we kind of think about that next 600 megawatts.
Speaker Change: You know what else what needs to happen to get there in terms of procuring.
Additional equipment may be expanding the substation.
Probably also as we think about are there any additional approvals or permits that are going to be needed to get to that gigawatt down in corsicana.
Thanks for the question Greg So first off we're very encouraged about what we're seeing with the results of Corsicana. So we are excited to scale up and leverage these advantages over the base of operations that we've created.
It's very valuable about corsicana is that one gigawatt interconnect that is already fully improved we have one gigawatt approved with a large flexible task force we have the required P. Eight to access all that power all of the required regulatory.
Latoya approvals or are there. So the next step to building that second phase that's 600 megawatts would be.
Procuring the.
Transformers and equipment necessary to expand the substation and then all of the equipment necessary to build out an additional building. So then you have switchgear medium voltage transformers low voltage gear immersion tanks et cetera. So now that we're starting to get some.
Any time under our belts here of course, Makena were able to identify which products we like Bachelor the second phase. So we are we're very excited to monetize that full capacity of one gigawatt of course scanner, we are making the development plan now for that second phase, we're going through the process, putting these together getting bids from vendors.
And I think in.
Speaker Change: And in due course here will be able to share an update on what those plans look like in terms of timeline cost than other particulars about that but we're very excited about taking that full effect to the full one gigawatt.
Okay, great. Thanks for that and then just pivoting a little bit.
As I think about E S S Medtronic and that acquisition.
We're realizing that he has.
Speaker Change: Medtronic number one customers riot.
As we think about the potential capacity to.
To scale up or build out I mean, clearly there's demand for.
E S S Medtronic.
Services equipment that only seems to be rising with.
Speaker Change: Increases to the grid increases demand for data centers, obviously, increasing demand for bitcoin mining.
I guess as we think about the ability to scale that business over the next two to three years, how should we be thinking about the potential like deploy capital.
Speaker Change: In that vertical to kind of get.
And maybe unlock the potential that that essas.
Tore towards a broader market.
Yeah. So first a REIT is actually not <unk>.
Yes, that's medtronic largest customer as far as I'm aware they have a more a small cost customer overall as you're noting Greg with the expansion of the AI HBC datacenter space. There is huge demand right now their results like we kind of touched on a little bit last quarter had been impacted as Blake bye.
By supply chain constraints and some major legacy jobs that have been taking up all of their capacity. So we've done a number of things to alleviate that over the second quarter, we believe the supply chain constraints.
And we.
We once this job clears through which is expected to happen in the second half of this year now will be able to start doing all these jobs in the data center AI HBC space. So we're pretty excited about that.
We are also we've been.
Working to secure additional for capacity for they're able to do more production at one time and we have been looking at other opportunities to scale that business as well so I don't have a.
Speaker Change: Affinitive number or any type of guidance like that to give you Greg but I can tell you. In addition to scaling our beckmann mining business, we are focused on making sure ESF Medtronic.
Speaker Change: To capture the opportunity in the data center space as well.
Okay perfect Hey, thank.
You very much for the time everybody.
Thank you Greg.
Okay. At this time, we will take our next question from Darren <unk> from Roth MTN operator.
Hey, guys can you hear me.
I hear you Darren.
Speaker Change: Great.
Speaker Change: Two if I may 1st just.
Speaker Change: As we think about 75 that you have going to 100.
In light of you guys buying block mining and talking about the cost for Brexit has been more favorable than of course, Canada.
Speaker Change: I'm just kind of curious with.
Now the entre maybe.
Speaker Change: Laughs, having cycle, we didn't have as many people chasing power assets now we kind of have a new category there.
How are you guys thinking about kind of achieving that goal and are you seeing more of a challenge to procure.
Speaker Change: Larger power assets I E over 100 plus megawatts.
Organically.
Speaker Change: Is your growth strategy given that involved more.
Acquisitions.
Speaker Change: Second question.
Obviously, we all came back from from Nashville, There were a large presence on the on the conservative side.
And I know there was also some some democratic problems. So Jason I'm curious to kind of get your views about how you feel like.
Crypto and bitcoin is going to play a role in the election beyond just.
Yeah.
Jason: The Republican party and even RFK in on what your general thoughts are if the Democrats will come around to that.
You'll have maybe even more of a tailwind than you already have right now thanks.
Thank you Darren Okay. So first question on how we look at achieving 75 back fashion.
The foundation to our business has been this vertically integrated strategy, where we focus on getting access to power. So that's why we prioritize corsicana going back over two years now securing that capacity. So we would have about one gigawatt pipeline. So that is our number one focus always at riot how can we secure this.
Power capacity and we've been successful doing that organically with demonstrating our results and our community benefit in Texas and as you noted Darrin, we're doing it inorganically as well.
Riot has.
The best corporate development and M&A team in the industry. We are scouring over all deals and any time, we're diving into deals in incredible detail and we're moving forward with those that we think are accretive and those that will add capacity to Ryan so.
You'll see us doing both of these things to get to our ultimate goal, we're going to continue to pursue organic opportunities leveraging rice internal development and sourcing capability and we're going to be in the market looking at deals, but as always being very very selective.
Jason: Number one priority I'll just leave you with that Ryan is carrying this power capacity and getting the equipment necessary to develop that capacity.
Onto your second question about Nashville, and public policy.
Jason: So Ryan had we began investing in our public policy effort about two years ago, because we saw the threat looming around this entire space. We saw a whole of government attack on this industry, whether it be in Congress, whether it be.
Jason: The the SEC the White house.
Speaker Change: The Treasury Department.
Been a tax hit every ingalls, so we knew we needed to.
In order to protect our own basis, and the whole industry been investing in this and working with our peers working with industry groups to educate and advance this industry.
We have had.
Speaker Change: Seth on both sides of the aisle, while you know Nashville had a predominantly Republican presence.
Speaker Change: At the conference itself. In addition to before the conference on all the time work color.
Speaker Change: Collaboratively with some very strong Democrats, who get this issue I'm just trying to advance it.
Speaker Change: What we're seeing playing out is the game theory that people apply to bitcoin and lots of different angles.
Speaker Change: It takes one party to begin embracing bitcoin more in a regulatory framework in support for the industry to show. The other party why that's important and I think we're already seeing that play out a prominent Democrats sure ally this space I've been writing letters to the National Party encouraging.
Speaker Change: Shifting this issue there has been news reports up.
Speaker Change: Vice President Harris's campaign looking to reach out to the industry and reset relations. So.
Speaker Change: We see this as a success of our strategy in action as more prominent politicians lawmakers get behind bitcoin, there's an incentive for other politicians to do the same and the end result is going to be bitcoin is a nonpartisan issue because breakpoints important to everyone. That's the goal that we're trying to work towards.
Speaker Change: Okay.
Speaker Change: Great. Thank you.
Dan: Thank you Dan.
Dan: Our next question comes from Lucas pipes, B Riley Securities operator.
Lucas Nathaniel Pipes: Thank you very much felt good afternoon, everyone.
Speaker Change: Jason.
Lucas Nathaniel Pipes: I wanted to ask a little bit about.
Lucas Nathaniel Pipes: The HBC side and the amount of attention that has been getting in the industry number of your peers talking about kind of using.
Speaker Change: Gigawatts megawatts.
Speaker Change: Two.
Speaker Change: <unk> Gpus.
Speaker Change: How does right think about this one in terms of the portfolio of power that you have and then two more broadly how it might impact the industry. Thank you.
Lucas Nathaniel Pipes: Thank you Lucas so.
Speaker Change: Our business plan is to be the best fit quite minor in the sector kind of our thesis says no bitcoin miner has perfected this yet Nickelodeon right everyone has a different take on approach everyone is still figuring. This out so what we wanted to do is devote our time, our resources to optimizing our bitcoin.
Speaker Change: Mining operations scaling those operations and being the best at quite minor that we can we believe over the long term this foothold in bitcoin mining.
Speaker Change: Bind with the price appreciation that is forecasted for bitcoin will pay off long term that will be the most valuable valuable use of our power.
Speaker Change: While there is discussion in the industry of certain players gain.
Speaker Change: <unk> contracts are getting involved with AI.
Speaker Change: It really does take a different development capability. So for us that would be a distraction funding our operations and how we would be building a different type of infrastructure that would be costly or timely to revert back to bitcoin mining or maybe not possible at all if that commercialization of that capacity didn't work out so.
Speaker Change: We think it's important to stick to our long term strategy <unk> always been consistent on building and developing bitcoin mining assets.
Speaker Change: Now how this will affect the whole industry. This recent AI HBC phenomenon well I think we're seeing there is a massive competition for energy assets. These AI data centers are looking for capacity wherever they can find it all over the country.
Speaker Change: Hum.
Speaker Change: Frankly.
Speaker Change: These assets.
Speaker Change: Reach all of their capacity goals on the growth goals, they're going to need more generation. We believe that ultimately loads like bitcoin mining helped drive more generation like bitcoin mining loads are flexible AI HBC loads are not necessarily flexible so bitcoin miners helped bring that reliable baseload demand for energy.
Speaker Change: Generators with the flexibility to turn off the peaks time and this bitcoin mining, it's going to be a tool to bring more generation forward.
Speaker Change: I still think we have an advantage with what we're able to do and and.
Speaker Change: And in different communities operate in more rural areas, where maybe there's other data centers may not be able to operate.
Speaker Change: I think it's also challenging to build in more expensive certainly to build AI HBC infrastructure in the very hot climates, where you can make that claim mining work.
Speaker Change: Theres, a theres more competition for power capacity and I think that is a proving right strategy of prioritizing sourcing capacity that we have this one gigawatt that we that we can build on we have the organic pipeline to already get us very close to achieving our ultimate goals.
Speaker Change: Yeah.
Speaker Change: Jason Thank you very much for the perspective.
Speaker Change: Gratulation on the announcement.
Speaker Change: Regarding block mining.
Speaker Change: And the details you shared on the M&A strategy I wanted to ask about.
Speaker Change: The next steps.
Speaker Change: And in regards to your investment in and bid farms anything you could share at this point. Thank you very much.
Speaker Change: Sure so.
Speaker Change: As of right now a bit farms, we have no outstanding proposal I know we had a proposal we made public a while ago that was never tended to shareholders that was kind of brought forth. As our example of the challenges that we're seeing a good farm.
Speaker Change: <unk>.
Speaker Change: Frankly, we see some corporate governance concerns at bit farms, we are <unk> largest single shareholder and based on how they handle their proposal.
Speaker Change: Based on how they've handled.
Speaker Change: Our relationship since then implementing an off market a poison pill. Our view is that board is valuing some transmit over its duty to shareholders. So the only thing for our next step right. Now is the special meeting that's scheduled for October 29, we recognition that meeting a bit farm the schedule that meeting.
Speaker Change: We've nominated three we think very highly qualified and directors independent of both riot in bid farms, we think nominating those shareholders to the board will bring a much needed governance changes that were done.
Speaker Change: We see being required there so nothing except that shareholder meeting.
Speaker Change: On the plans right now.
Speaker Change: Okay.
Speaker Change: Jason Thank you very much for that update and to you and the entire team continued best of luck.
Lucas Nathaniel Pipes: Thank you Lucas.
Speaker Change: Okay.
Speaker Change: Great. Our next question will come from our registry at Jpmorgan operator.
Speaker Change: Hey, Thank you congrats on a course of Canada and yeah in the block money acquisition.
Speaker Change: I guess I had follow up to to Lucas's question and I certainly appreciate.
Speaker Change: The capital intensity and the risks of pivoting to HCC. My question for you. Jason is is there a structure.
Speaker Change: Or a price where.
Speaker Change: Maybe some of those risks are mitigated.
Speaker Change: Partner, where where that could be mitigated I guess there is a scenario in your mind, where you see that possibly you could explore this if the right deal structure right partner.
Speaker Change: Approaching.
Speaker Change: Okay.
Speaker Change: Thanks for the question.
Speaker Change: Uh huh.
Speaker Change: Obviously, there's some price worth of where things can be interested I think the challenge that we see is.
Speaker Change: The pricing that.
Speaker Change: It's generally going to be out there is perhaps less than we see as a long term upside and bitcoin when you factor in uncertainty I think the other things that we're seeing challenging.
Speaker Change: In pursuing these contracts is the duration of them I think if you look at the space right now core scientific has an excellent deal with coral reef. Their deal is what got it's got the whole industry excited about this but we haven't seen that replicated anywhere yet. So my question is is there demand.
Speaker Change: And for that similar type of deal structure, that's very favorable to core over a very long time out there.
Speaker Change: I think we're seeing industry chatter on hey is there even enough capital behind all the AI HBC development plans that are out there.
Speaker Change: At the pace that these applications are being commercialized I think theres a lot of uncertainty around that so hey, we we aren't rational economic actors. So if at some point there there was something that was incredibly beyond what we could ever potentially do with bitcoin mining adjusted for the risk of that business line succeeding.
Speaker Change: Yes, we would take a look at that.
Speaker Change: I'm skeptical as things play out, but that that's going to be the case.
Speaker Change: Understood that makes a lot of sense and I appreciate the color if I could add one one follow up and.
Speaker Change: And this may be an unfair comparison, but we track various minor as we try to look at the operating efficiency and clearly you guys have a cost advantage, but I was curious like internally how do you guys benchmark your operations from an upside perspective, and if there's an opportunity.
Speaker Change: To enhance that or are you happy with you guys as an opportunity kind of what's that path to our improving performance if you aren't happy with it.
Speaker Change: Yeah.
Rajeev: Yeah, Rajeev I mean to be Frank if you look at of our recent operating results we have not been pleased with our uptime.
Speaker Change: Historically and that's why we've been so focused on improving that that is mainly coming through with what we have going on of course, the cana, we have improved infrastructure there.
Speaker Change: Very optimistic about what we're seeing we're still in the very early days, we just turned on a ton of SaaS at one time, we're tweaking that optimizing that as that comes on in for the month of July but the preliminary results. We're seeing had got us very optimistic and as time goes on we think that's going to improve.
Speaker Change: Prove even more in parallel over at Rockdale, we have a lot of initiatives underway, we've talked about replacing some of the problematic problematic miners with.
Speaker Change: Micro became miners and we are very encouraged with what we're seeing in operating results. There. So we are holding ourselves to a very high standard.
Reggie: Reggie frankly, thats, probably the biggest priority right now alongside building new capacity of course, Makena and I think as we scale up here and leverage this direct energy cost per bit coin over a wider and wider scale.
Speaker Change: Combined with improving operating uptime, we're going to see some we expect to see some significantly improved results here. We will have a monthly update for July out next week and you'll see some of the progress that we've already seen on that front.
Speaker Change: Sounds good thanks a lot.
Rajeev: Thank you Rajeev.
Speaker Change: Okay. Our next call will come from Joe <unk> with Compass point research and trading operator.
Speaker Change: Hi, Thanks for the question.
Speaker Change: Just to piggyback off <unk> question related to uptime, as we look into the third quarter.
Speaker Change: Can you guys provide.
Speaker Change: On the power strategy.
Speaker Change: And maybe I expect a curtailment with the hot summer months here.
Speaker Change: So don't have any specific percentages of what we're looking at for the summer months as far as the power side and he goes in the second quarter of 2024, we received we achieved a $26 per megawatt hour cost the power Rockdale, that's inclusive of our power strategy and of course, the Cana just buying.
Speaker Change: Power at spot and curtailing during periods of high demand, we achieved a $39 per megawatt hour cost power. So on a combined basis, our cost of power for the second quarter was $27 August is typically one of the more challenging months in ERCOT, both with respect to heat and both.
Speaker Change: The extension the volatility we see in the power market. So if that the so far Texas had a pretty mild summer.
Speaker Change: That's because we've seen both mild weather and large groups of growth of renewable generation out of this year in Texas, So I think.
Speaker Change: You should expect to see a take cost of power for July and then going into August we'll see if this mild summer continues or not and what level of curtailment comes from that.
Speaker Change: Thanks, that's helpful and can we also get some color to the sequential increase in cash cash SG&A and maybe how we should think about that going forward as kind of course cannot ramped up.
Speaker Change #119: Yeah. So the increase in SG&A quarter over quarter really wasn't because of course, you cannot I think the main figure that we're really proud about this quarter is how our direct cost per bitcoin net of our power strategy went up only marginally from around 24000 to 25000.
Speaker Change: <unk>, despite the having and despite the increase in difficulty and the reason for that is we had this low cost of energy that is what scales linearly when we scale up and these other costs are more consistent.
Speaker Change: With respect to G&A.
Speaker Change: The driver for that cash cost increased quarter over quarter was mainly one time advisory fees associated with M&A activity. So.
Speaker Change: We still believe our run rate for G&A is around $25 million or having these temporary expenses that could increase that.
Speaker Change: If M&A opportunities are successful going forward and we've had some M&A advisory.
Speaker Change: Fees in the past quarter as well, but those aren't part of our ongoing cost of operations.
Speaker Change: Great. Thanks.
Joe: Thanks, Joe.
Speaker Change: Our next call comes from Martin <unk> at ATV capital operator.
Speaker Change: Okay.
Speaker Change: Martin.
Speaker Change: Martin Your line has been on mute Magic question on mute your line from your side. Please.
Martin: Sorry about that guys.
Martin: Quick question about minors any thoughts on the strategy to secure.
Martin: The miners to get from 70 extra Astra 100.
Speaker Change: So.
Speaker Change: With our existing <unk> purchase option of Martin we have the capacity secured to get to that 100 ex ash.
Speaker Change: That's if we fully exercised that micro BT option for 266000, or so and <unk> of course under the contract. We also have the ability to upgrade those miners and.
Speaker Change: With efficiency improvements that will get to even greater hashed right alongside that we're looking at what all manufacturers are putting out to the market. All the time, we're testing what's going on we're asking questions. We're negotiating.
Martin: All of <unk> business is always up for grabs and we like the results that we get when manufacturers of any products or competing for business. We've seen the benefits of that firsthand. So short answer to your question. Martin is the existing micro <unk> purchase option gives us enough supply to get to the 100 extra cash, but we're looking at options to go even.
Martin: Beyond that.
Speaker Change: Super Thank you.
Speaker Change: Believe.
Speaker Change: Other revenue.
Speaker Change: Was disclose which was.
Speaker Change: The <unk>.
Speaker Change: Remnants of the hosting customer can you give us a little update on where that stands.
calling you: Sure Let me turn the question over to our CFO, calling you.
Speaker Change: Okay.
Jason: Thanks, Jason.
Speaker Change: So Martin given the status of our third party hosting contracts.
Martin: Management in conjunction with discussions with our auditors, we decided that it would be more useful information that we could incur.
Martin: Included those third party hosting revenues in hosting costs into others, so you'll see it there.
Speaker Change: With respect to sort of the.
Speaker Change: The current status on that as you know.
Speaker Change: No.
Speaker Change: Those contracts are generally in litigation so.
Speaker Change: We can't we can't say anything more than that.
Speaker Change: Okay, great. Thanks, very much that's all for me.
Bill <unk>: Great. Our next call is from Bill <unk> at Stifel.
Bill <unk>: Yes, good evening gentlemen, thank you for taking my questions and congratulations once again on the recent block mining acquisition.
Bill <unk>: For my first question was just hoping you'd be able to share your outlook for bitcoin mining economics over the near to medium term.
Speaker Change: And how these market dynamics are impacting the M&A pipeline.
Speaker Change: Our existing growth opportunities, obviously varieties financially well positioned.
Speaker Change #104: In this in this current market to get some more color there. Thanks.
Bill <unk>: Sure.
Bill <unk>: Yeah. Thank you Bill for the question, we've seen bitcoin mining economics streamed more than they ever have been we had all of the second quarter. The industry saw a all time low past price and even today, we're at $46.
Bill <unk>: <unk> per day.
Bill <unk>: $46 per pet ads per day, so definitely a challenging time for our bitcoin mining economics, we've had there having the price is not appreciated a much since be happening, but network difficulty has continued to increase. So this is obviously why we focus on having such a low cost of production and focusing on the power strategy first and foremost.
Bill <unk>: I think this creates a dynamic where riot can potentially have M&A opportunities.
Speaker Change #130: Where there are miners who.
Bill <unk>: Or maybe relying on that or have some type of financial structure, where these cash prices make them unprofitable unable to continue doing business that is where a more well capitalized player like riot is able to do.
Bill <unk>: To find opportunities other things that we could see as miners that in response to these constrained economics need to upgrade their fleets. They have outdated fleets, but they don't have the capital to do it that is where our partnership with riot through an acquisition is a big win for both parties. So we're looking closely at any.
Speaker Change: He has to come up.
Speaker Change: Like I said I'm incredibly proud of the corporate development team that we've assembled at riot in the detail and what's our whole team is able to evaluate transactions on a regular basis and we are always interested in opportunities to continue to scale our operating footprint.
Speaker Change: Awesome. Thank you for that for that response.
Speaker Change: Susan I know your team has.
Susan: Super bullish on that claim.
Bill <unk>: Space.
Speaker Change: And the outlook here. So I wanted to ask you a bigger picture question.
Speaker Change #102: Just based on what we saw transpire at this point in 2024 conference last week, it's evident that the industry has become a top of mind and has amassed a lot of punching power in the political sphere.
Speaker Change #102: Trump, Kentucky, and Lummus, all announced some variation of appliances.
Speaker Change #116: Strategic reserve.
Speaker Change #111: And to help protect them that were captured in the United States.
Speaker Change #112: Just curious if you see a potential convergence down the road between the state and big coin miners.
Speaker Change #101: Any color to that.
Speaker Change #110: Yeah, I think that is something that we are already seeing at least overseas.
Speaker Change: Some of our competitors have entered into.
Speaker Change: Partnerships with sovereign wealth funds, which are obviously, an extension of the nation state to monetize excess capacity.
Speaker Change #103: Where we are to see that in United States.
Speaker Change #103: As you know to be determined I think where we're typically seen the cheaper energy pricing the best energy markets, where there is not as close of a relationship between government and power generations in the utilities, but our fundamental thesis is where it's bitcoin mining is the ideal tool to accumulate <unk>.
Speaker Change #103: With a low energy cost.
Speaker Change: Great.
Speaker Change: <unk> dominant input costs, you can accumulate bitcoin at a discount to the market price if you're an efficient operator so.
Speaker Change: State had underutilized assets and the ability to do that paired with a desire to accumulate bitcoin that seems like a good strategy.
Speaker Change: The United States will be a bit slower to ever get there I think and other.
Speaker Change: Other nations are maybe less Democratic nation things are able to move a bit quicker.
Speaker Change: With the governments in place there, but in the long term future I think we will see bitcoin mining paired with energy assets and every level of the stack and of course that'll be it.
Speaker Change: Include our partnership with government in some way.
Speaker Change #105: Awesome I appreciate that.
Speaker Change #105: The sponsor.
Brett <unk>: Thanks. Our next question comes from Brett <unk> from Cantor Fitzgerald operator.
Brett: Perfect. Thanks, guys for taking my question, maybe just another.
Brett <unk>: Another one on the M&A.
Speaker Change #117: What do you guys.
Speaker Change #114: Look for when evaluating the opportunities that are kind of coming in front of you is it location is it size of the access to power is it all of it.
Speaker Change: And are you.
Speaker Change #124: Would you prioritize maybe adding additional U S assets or international assets, where power costs might be more affordable, but I guess it might be a bit more.
Speaker Change #100: Unstable political environment and how do you guys think about I guess, you dialing that entire landscape.
Speaker Change #100: Thanks, Brian Let me turn that question over to Jason Chang, Our executive Vice President and head of corporate development.
Speaker Change #100: Okay.
Jason Chung: Hey, Brad Thanks for the question.
Jason Chung: It's an interesting one.
Jason Chung: So let me tackle that I guess part by part the first part in terms of what we look at when we look at M&A opportunities.
Jason Chung: First and foremost is power.
Jason Chung: Power is always top of mind, so what that means is.
Jason Chung: Access to power and cost of power alright.
Speaker Change #100: We're in an industry that.
Speaker Change #100: It is cyclical and we tried to take a very long term view on what that means.
Speaker Change #100: You know what the cost of power means for us at different points in the cycle that we know we're going to come.
Speaker Change #100: So finding access to large scale amounts of power at a price that is.
Speaker Change #100: Economically viable is really the top I guess top consideration for us when we look at opportunities.
Speaker Change #100: When it comes to jurisdictions entering new markets in the U S.
Speaker Change #100: What's interesting about the block deal for example.
Speaker Change #100: Is this did represent our first acquisition outside of ERCOT.
Speaker Change #100: Obviously, we're very familiar with <unk> and how the power markets work there.
Speaker Change #113: But it seems less familiar with some of these new markets and with block.
Speaker Change #113: As opposed to just acquiring operating assets. We have also acquired a team.
Speaker Change #113: That has built the block business in and has local relationships and local expertise in MISO.
Speaker Change #113: These really are another key compelling aspect to that particular transaction, which which made it more attractive for us to pursue and eventually a consummate.
Speaker Change #113: So I'd say, it's when it comes to new markets. We obviously want to make sure. We've got the right team and the right expertise in place to pursue that as well.
Speaker Change #113: <unk> be comfortable operating in an environment that is going to be is going to continue to be cyclical going forward.
Speaker Change #100: Internationally we.
Speaker Change #100: You know just given our position in the industry, we do see a lot of opportunities outside of the U S as well.
Speaker Change #100: I'd like to believe we're one of the first calls that people do make when they want to reach out to the large public miners about new opportunities internationally.
Speaker Change #100: The challenge there is kind of similar to even just moving outside new jurisdictions from from ERCOT. Its whats, our familiarity and comfort comfort level with moving into that new market, who are the partners we're talking to.
Speaker Change #100: And ultimately even if it comes with what looks like a lower price on power.
Speaker Change #100: Do we feel the rewards outweigh the potential risks and so that's really how we evaluate international opportunities, we're not close to it but I think the threshold from a risk perspective is higher and so the reward or to offset that would all have to be a correspondingly higher as well.
Speaker Change #125: Oh. Thank you maybe just one quick follow up on I don't know if I felt like the.
Speaker Change #160: Capacity auction in PJM.
Speaker Change #125: Tuckey assets within PGM or now.
Speaker Change #121: No the Kentucky assets are in MISO.
Speaker Change #100: And in the TVA, Tennessee Valley authority, so not in PJM.
Speaker Change #115: Okay awesome. Thank you guys. So I'm not sure I appreciate it.
Bill <unk>: Thanks Bill.
Bill <unk>: Okay.
Bill <unk>: Great. Our next question is from Mike Grondahl.
Mike Grondahl: Northland Securities.
Mike Grondahl: Later.
Mike Grondahl: Hey, Thanks, guys just to.
Speaker Change #120: Follow up on that.
Speaker Change #131: Kentucky acquisition, what do you guys see as the operational challenges there.
Speaker Change #119: You know, it's pretty small to date, but the growth looks pretty significant.
Speaker Change #127: What do you see as those operational challenges.
Speaker Change #127: Now, let me turn that question back over to Jason Chung.
Jason: Thanks, Jason.
Mike Grondahl:
Jason Chung: Right right now the <unk>.
Speaker Change #135: Logmein seem operates about one extra hush of soft mining capacity, we want to get that up to the $15 eight.
Speaker Change #122: End of next year target.
Speaker Change #129: And I think one of the one of the benefits one of the strategic benefits to this deal on both sides is really what we're trying is.
Mike Grondahl: This huge opportunity for the team.
Mike Grondahl: The availability of expansion capacity.
Speaker Change #128: Tied with riots strong balance sheet and the availability of capital that we have to contribute to that so I think in the near term. The focus is really going to be on building out on the existing opportunities to expand.
Speaker Change #128: And also to take advantage of getting access to more power through new Ppas.
Speaker Change #143: They bring that they bring the relationships on the ground and we bring the capital and capabilities to help make those happen.
Mike Grondahl: So from that perspective, I think there's really interesting marriage of the two companies there but.
Mike Grondahl: But it's really going to come down to just building out and taking advantage of the expansion opportunities.
Mike Grondahl: We have on the ground.
Speaker Change #126: Fair enough.
Speaker Change #126: Our next question comes from Michael and I see from HC Wainwright operator.
Michael: Hey, good afternoon, guys and congratulations so with all the progress of course of candidates a lot of hash rate in short amount of time, so it's great to see that.
Michael: First one for me do you guys plan to deploy air cooled the immersion infrastructure as you build out and convert block mining pipeline of opportunities over the near to longer term here in Kentucky, and if you could just share what you're seeing in the market today as it relates to the cost per megawatt to build air cooled versus immersion we've been hearing.
Speaker Change #141: Talks of immersion really starting to come down.
Speaker Change #123: Under priced per megawatt basis. So you guys are experts in the space I wanted to get your thoughts there.
Speaker Change #132: Sure. So at Kentucky, Mike we are going to be building a mix of both air cooled and immersion currently all of their operations are air cooled.
Speaker Change #138: We believe though that immersion will likely be in play for expansion.
Speaker Change #147: But I don't think we would be looking to retrofit any of the existing air cooled operation at least in the near term I think they've shown a very strong operating results with their air cooled assets.
Speaker Change #140: If you look at the cost per megawatt like many things I think you see in this sector. It depends on what you are.
Speaker Change #132:
Speaker Change #132: Including into that cost and I think you may recall at our Corsicana Investor day.
Speaker Change #132: Our deck there we had a breakdown of the cost per megawatt and things that are included in there. So when we look at build out building out something like for example of course the Cana. What we include in that is the substation expansion that's needed because at that large capacity, we want to own their own substation had the advantages that we get from that.
Speaker Change #132: Other operators if they are building out on a smaller scale and not needing to build a substation.
Speaker Change #123: Then instead leasing access to capacity, which reduces the upfront cost, but has its own risks like anytime youre leasing versus buying and owning than than.
Speaker Change #145: And then youre going to have a lower.
Speaker Change #123: Lower capex costs.
Speaker Change #123: I think that.
Speaker Change #123: There are more and more players entering the space.
Speaker Change #144: Some of the equipment, there's a bunch of equipment that goes into it so.
Speaker Change #144: It may be you may be getting a better price for example on a dry cooler, but maybe I think is more expensive or maybe the fluid is getting cheaper, but pump equipment is more expensive. So there's there's a bunch of equipment there.
Speaker Change #146: I don't think that we've seen too significant of a change in that market yet, but we are still in the process of getting bids and determining what we will put together for a phase II expansion at corsicana. So it's kind of a to be determined what the final pricing will look like.
Speaker Change #146: Then after going through that exercise will have a better answer to your question.
Speaker Change #152: Got it got it appreciate the color there and how do you plan to integrate the management team from block mining into right and what are some of the noteworthy resources skills that this broader team really brings to the company I know you highlighted boots on the ground local relationships with MISO, but any other notable skill sets are resources that this team could.
Speaker Change #123: Bring on board.
Speaker Change #123: Yes.
Speaker Change #139: The bulk mining team has done an excellent job building that capacity very quickly.
Speaker Change #137: And showing strong operational uptime, so they've demonstrated their excellent bitcoin mining from the development and operating standpoint, and that is very advantageous to us. So you couple that with the advent with their local relationships and a capacity that they've been able to secure for growth and vacant.
Speaker Change #137: And Kentucky doing what they've already done.
Speaker Change #137: Good at what they do and growing the capacity out there so they really fit into riot basically as our Kentucky Division. We have of course, the core of our operations here in Texas and then now we have this Kentucky.
Speaker Change #136: Uh huh.
Speaker Change #136: Arm operating base as well and what's great is all of these teams can work together to share knowledge.
Speaker Change #134: My name is a game of accumulated knowledge every time there is no book on how to do this so everyone can share what they've learned works and what doesn't and make all teams better at what they do so we are very happy to have block mining on board no longer block mining now write Kentucky.
Speaker Change #134: Great. That's all from me Thanks, Jason.
Speaker Change #148: Okay, Great. We've got one more question from John <unk> of Needham <unk> company operator.
John: Hey, guys. Thanks for taking my question and congrats on the highest growth here.
Speaker Change #159: Two for you one do you.
Speaker Change #157: See a world where the H P. C. AI starts to become a competitive pressure that theyre quite mining.
Speaker Change #155: Here that even Texas might be suitable for those sites.
Speaker Change #151: Do you see a world longer term or maybe bitcoin mining is.
Speaker Change #142: Pushed outside the U S or to other even more remote locations. That's first question and then second question just wondering if your due diligence Jack Dorsey as you know new mining rigs they did that to deal with with core scientific just wondering if you have any thoughts on the on that chip and that red.
Speaker Change #154: Sure. Thanks for the question so starting backwards I will tell you, where we are speaking with all manufacturers and evaluating things.
Speaker Change #142: On an ongoing basis.
Speaker Change #134: Value, having a great team here I won't comment on specifically any ones.
Speaker Change #134: <unk>, while discussions are ongoing so I know block has invested a lot in achieving this goal it would be very interesting to see how they progress. So we talk to them as we've talked to others, but don't want to give any direct commentary on anything thats not necessarily public at this time.
Speaker Change #134: As far as competition with AI HBC, Yes, I do think bitcoin miner, who are we competing with AI HBC for access to power.
Speaker Change #162: I think big coin miners are a bit easier for the grid to get comfortable with than AIA HBC because of the flexible nature of our operations. So I think it is a little bit easier pikmin miners have an advantage there and get it approved for capacity.
Speaker Change #134: Given that bitcoin mining is our core focus.
Speaker Change #134: If more capacity is being used for AI and HTC are other miners are diverting their capacity to AI HBC instead of bitcoin mining that means the network cash rate and thus bitcoin mining difficulty of growing slower and thats good for us theres less competition.
Speaker Change #153: Great. Thanks, guys appreciate it.
Speaker Change #156: Thank you.
Speaker Change #156: Okay at this time Theres no further questions.
Speaker Change #161: Thank everybody for joining Ryan on our second quarter earnings call and we look forward updating you on our progress in November.
Speaker Change #158: Thank you.
Speaker Change #134: Thank you.
Speaker Change #149: This concludes today's teleconference. You may now disconnect your lines at this time. Thank you for your participation.
Speaker Change #149: [music].