Q2 2025 Riot Platforms Earnings Call

Good day, and thank you for standing by.

Welcome to Wright, one second quarter 2025 earnings Conference call. Please note that all participants have been placed in a listen only mode until the question and answer session begins following the Companys presentation. After his prepared remarks.

Please also be advised that today's call is being recorded.

I would now like to turn the conference call over to Nick person, Vice President of capital markets and Investor Relations advisor platforms. Please go ahead.

Jason Les: Thank you, Operator. Good afternoon and welcome to Riot Platforms' second quarter earnings conference call. My name is Philip McPherson, Vice President of Capital Markets and Investor Relations, and joining me on today's call from Riot are Jason Les, CEO; Benjamin Yee, Executive Chairman; Colin Yee, CFO; and Jason Chung, Executive Vice President and Head of Corporate Development and Strategy. On the Riot Investor Relations website, you can find our second quarter earnings press release and an accompanying earnings presentation, which are intended to supplement today's 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 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.

Thank you operator, good afternoon, and welcome to my platform second quarter Earnings Conference call. My name is Phil Mcpherson, Vice President capital markets and Investor Relations and joining me on today's call from Ryan adjacent less CEO, Benjamin Executive Chairman Collin <unk> CFO.

Jason Chang Executive Vice President and head of corporate development and strategy.

On the right Investor Relations website, you can find our second quarter earnings press release and accompanying earnings presentation, which are intended to supplement todays prepared remarks, and which include 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.

Jason Les: 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 and Form 10-Q, including for the three months ended June 30, 2025, which will be filed later today, as well as other filings with the Securities and Exchange Commission. With that, I will turn the call over to Jason Les, CEO of Riot Platforms. Thank you, Phil, and good afternoon, everyone. I'm excited to walk through the results of another strong quarter for Riot.

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 todays.

And in the risk factors section of our Form 10-K and forms 10-Q, including for three months ended June 32025, which will be filed later today as well as other filings with the Securities and Exchange Commission with that I will turn the call over to Jason Lang CEO of REIT platforms.

Thank you Phil and good afternoon, everyone.

I'm excited to walk through the results of another strong quarter for Ryan.

Jason Les: But before we dive into second quarter earnings, I'd like to share Riot's strategic roadmap and provide some additional context to the development of our data center business and how we view all of our operations working together in a complementary manner. We are incredibly proud of the position that our company, Riot Platforms, is in today. Over the last seven years, we have scaled incredibly, both in terms of our size and our capabilities, representing the culmination of years of hard work, long-term planning, and coordination, all with a view to taking ownership of our future and placing our destiny in our own hands.

Before we dive into second quarter earnings I'd like to share right strategic roadmap and provide some additional context to the development of our data center business and how we view all of our operations working together in a complementary manner.

We are incredibly proud of the position that our company wide platforms isn't today.

Over the last seven years, we have scales incredibly both in terms of our size and our capabilities representing.

Representing the culmination of years of hard work long term planning and coordination.

All with a view to taking ownership of our future and placing our destiny in our own hands.

Jason Les: We have grown and evolved as a company, driven by our ability to develop world-class capabilities, including land and power procurement, Bitcoin mining at a globally significant scale, power management and trading at scale, engineering, manufacturing, and servicing critical electrical infrastructure, and significant access to global capital markets. Recently, we have added a new world-class capability. With the hiring of Jonathan Gibbs, Riot's Chief Data Center Officer, and other highly capable professionals from the traditional data center industry, we find ourselves at the beginning of another exciting chapter in Riot's story. With this new capability, we are about to undergo the next step of our evolution as a company. With the ability to build and develop high-performance compute data centers, we will transform Riot by establishing a robust and scalable data center segment.

We have grown and evolved as a company driven by our ability to develop world class capabilities, including land and power procurement.

<unk> mining at a globally significant scale.

However management and trading at scale.

Engineering manufacturing and servicing critical electrical infrastructure and significant access to global capital markets reached.

Recently, we have added a new world class capability.

With the hiring of Jonathan Kim Ryan Chief of Datacenter officer, and other highly capable professionals from the traditional data center industry, we find ourselves at the beginning of another exciting chapter in REIT story.

With this new capability, we are about to undergo the next step of our evolution as a company.

With the ability to build and develop high performance compute data centers, we will transform right by establishing a robust and scalable data center segment.

Jason Les: Successful execution in this regard is Riot's top priority, and we recognize the importance of clearly articulating our approach to investors and stakeholders. To be clear, we are not pursuing a so-called pivot into AI HPC initiative with a view of doing a quote unquote "deal." Rather, we have added a new data center development capability, which we will apply to as much of our power portfolio as possible, and which will transform our company in the years to come. This mindset informs all of our decisions, enabling us to capitalize on this exciting opportunity with discipline and foresight. If I had to summarize our strategy into a simple elevator pitch, the pitch would be that Riot is in the business of monetizing megawatts with a view to utilizing as much of our power portfolio as possible and maximizing the value of our megawatts over the long term.

Successful execution in this regard is top priority and we recognize the importance of clearly articulated our approach to investors and stakeholders.

To be clear, we are not pursuing a so called pivot into AI HBC initiatives with a view of doing a quote unquote deal.

Rather we have added a new data center development capability, which we will apply to as much of our power portfolio as possible and which will transform our company in the years to come.

This mindset informs all of our decisions, enabling us to capitalize on this exciting opportunity with discipline and foresight.

If I had to summarize our strategy into a simple elevator pitch the picture would be that right in the business.

<unk> of monetizing megawatts with a view to utilizing as much of our power portfolio as possible and maximizing the value of our megawatts over the long term.

Jason Les: We will maximize the value of our operational assets, specifically optimizing our megawatts to use all available power. We have a great advantage with a portfolio of ready-for-service power anchored by our operational flagship sites at Rockdale and Corsicana. These assets are not conceptual. They are active today thanks to prior investments in Bitcoin mining infrastructure. This enables more certain execution on our data center development initiative compared to a standalone traditional developer. Our Bitcoin mining capabilities have proven integral to the strategy, as they underpin our ready-for-service power portfolio. By utilizing our mining capabilities, we have put ourselves in the fortunate position we find ourselves in today, and we can secure new power sites by playing to our strengths, profitably managing risk, and simultaneously creating a sustainable cycle of growth.

We will maximize the value of our operational assets.

Optimizing our megawatts to use all available power.

We have a great advantage with the portfolio up ready for service power.

Anchored by our operational flagship sites at Raphael and poor scanner. These.

These assets are not conceptual they are active today, thanks to prior investments in bitcoin mining infrastructure Vista.

This enables more certain execution on our data center development initiative compared to its standalone traditional developer.

Our bitcoin mining capabilities have proven integral to their strategy as they underpin our ready for service power portfolio.

By utilizing our binding capabilities, we have put ourselves in the fortunate position, we find ourselves in today and we can secure new power sites by playing to our strengths profitably managing risk and simultaneously, creating a sustainable cycle of growth.

Jason Les: Given the attractive economics and higher valuation multiples associated with data center leases to high-quality tenants, converting as much of our power portfolio to data centers remains our preferred end use for those assets. The pace of transition from Bitcoin mining to data centers will be influenced by customer demand trends, the availability of financing, and the general data center market. Our current efforts are laying a strong foundation for a pipeline of future transactions.

Given the attractive economics, and higher valuation multiples associated with data center leases to high quality tenants converting as much of our power portfolio to data centers remains our preferred and use for those assets.

The pace of transition from bitcoin mining the data centers will be influenced by customer demand trends.

Availability of financing and the general data center market.

Our current efforts are laying a strong foundation for our pipeline of future transactions.

Jason Les: We have many advantages that have put us in an incredible position because we offer a unique combination of significant scale of readily available power in high-demand jurisdictions, a strong balance sheet underpinned by holding more than 19,000 Bitcoin and $330 million in cash, and with significant access to the capital markets, experienced hyperscale data center leadership and development capability, scaled efficient Bitcoin mining revenues, generating hundreds of millions of dollars in revenues and cash flows annually, and battled hardened and experienced management and operations teams. With this framework, our mission is clear. Riot will maximize value across our entire power portfolio with a view to ensuring no stranded capacity, progressively shift power capacity towards data centers, strategically expand our power assets utilizing Bitcoin mining where advantageous, and increase our shareholders' exposure to value-accreting assets.

We have many advantages that have put us in an incredible position because we offer a unique combination of <unk>.

Significant scale of readily available power in high demand jurisdictions, a strong balance sheet underpinned by holding more than 19000, bitcoin and $330 million in cash and with significant access to the capital markets.

Experienced hyperscale data center leadership and development capability.

Scaled efficient bitcoin mining revenues generating hundreds of millions of dollars in revenues and cash flows annually and battled hardened and experienced management and operations teams.

With this framework our mission is clear right will maximize value across our entire power portfolio with a view to ensuring no streaming capacity progressively shift power capacity towards data centers strategically expand our power assets utilizing bitcoin mining where advent.

Pages and increase our shareholders' exposure to value accretive assets.

Jason Les: We are strategically positioned at the convergence of surging compute demand and Bitcoin growth, offering compelling potential for shareholder value creation. Now, turning to the second quarter, we continue to aggressively pursue further development of our data center business buildout and achieved a key milestone in our development plan. More specifically, we announced the hiring of Jonathan Gibbs as our Chief Data Center Officer. As we searched for the right person to take leadership of this primary initiative for Riot, Jonathan's name repeatedly came strongly recommended to us by a number of different industry parties. The market for data center talent is incredibly competitive, and professionals with Jonathan's level of expertise are in very high demand. Jonathan's decision to join Riot and lead our data center platform is a testament to the unique opportunities set available to Riot and our ability to succeed.

We are strategically positioned at the convergence of searching compute demand and bitcoin growth offering compelling potential for shareholder value creation.

Now turning to the second quarter.

We continue to aggressively pursue further development of our data center business built out and achieved a key milestone in our development plan and more specifically, we announced the hiring of Jonathan Kipp as our Chief Data Center Officer.

As we search for the right person to take leadership of this primary initiative for riot Jonathan's name.

Repeatedly came strongly recommended to us by a number of different industry parties.

The market for data center talent is incredibly competitive and professionals with Jonathan Globals expertise are in very high demand.

Jonathan.

Join Ryan and lead our data center platform is a testament to the unique opportunity set available to riot and our ability to succeed.

Jason Les: We are incredibly excited to have someone of Jonathan's caliber on board to drive our efforts. During the second quarter, we also continued to acquire additional land around our Corsicana site and now have a total footprint of 858 acres. Adding additional land ensures that we can fully utilize the large-scale access to power that we have on site without leaving any power stranded and therefore maximize the value for Riot, which we believe is the premier data center development opportunity in the country. We continue to see strong demand in the market, and we remain engaged in ongoing discussions with interested parties.

We are incredibly excited to have someone of John's caliber onboard to drive our efforts.

During the second quarter. We also continued to acquire additional land around our Corsicana site and now have a total footprint of 858 acres.

Adding additional land ensures that we can fully utilize the large scale access to power that we have on site without leaving any powertrain business and therefore maximize the value for riot, which we believe is the Premier data center development opportunity in the country.

We continued to see strong demand in the market and we remain engaged in ongoing discussions with interested parties.

Jason Les: With that said, in the second quarter, we also continue to make strong progress in our Bitcoin mining business, where we have made significant operational efficiency improvements that now place us among the most efficient operators in the industry, while also focusing on lower costs and maintaining a disciplined approach to capital allocation. Riot has also maintained our strong balance sheet, a longstanding key pillar of our business, ending the second quarter with over 19,000 Bitcoin and $330 million in cash on our balance sheet, representing $2.4 billion in liquidity today. We continue to sell our monthly Bitcoin production in order to finance our ongoing operations while raising additional funds via a $200 million Bitcoin collateralized financing facility with Coinbase, allowing us to reduce issuance of stock through our ATM and fund our multiple growth opportunities, driving long-term shareholder value creation.

With that said in the second quarter. We also continued to make strong progress in our remaining business, where we have made significant operational efficiency improvements that now place us among the most efficient operators in the industry, while also focusing on lower costs and maintaining a disciplined approach.

The capital allocation.

Brian has also maintained our strong balance sheet, our long standing key pillar of our business and in the second quarter with over 19000 did claim and $330 million in cash on our balance sheet, representing $2 4 billion in liquidity today.

We continued to sell our monthly bitcoin production in order to finance, our ongoing operations, while raising additional funds via a $200 million.

Bitcoin collateralized financing facility with coinbase, allowing us to reduce the issuance of stock through our ATM and fund our multiple growth opportunities driving long term shareholder value creation.

Jason Les: I am proud of what we have been able to achieve in the second quarter. These results and the financial and operational strength of the company will allow us to continue aggressively growing our data center business in a way that will maximize long-term value for our shareholders. I look forward to continuing to report on our progress throughout the rest of the year and beyond. With that, I would now like to turn the call over to Colin Yee, CFO of Riot Platforms, to present our second quarter financial update.

I am proud of what we've been able to achieve in the second quarter.

These results and the financial and operational strength of the company will allow us to continue aggressively growing our data center business in a way that will maximize long term value for our shareholders.

I look forward to continuing to report on our progress throughout the rest of the year and beyond.

With that I would now like to turn the call over to Collin <unk> CFO, a variety of platforms to present, our second quarter financial update.

Colin Yee: Thank you, Jason. I am pleased to present Riot's financial results for the second quarter of 2025. For ease of reference, we have highlighted key metrics on slide eight, which presents a snapshot of key financial and operating metrics for the second quarter. During the second quarter, Riot increased its self-mining hash rate from 33.7 exahash to 35.4 exahash, representing a 5% increase over the course of the quarter, while global hash rate rose by 9% in the same period. Riot produced 1,426 Bitcoin in the second quarter, a slight decrease as compared to the 1,530 Bitcoin produced in the prior quarter, driven by the global network hash rate growing at a greater pace than Riot's deployed hash rate, given our shift in strategic focus to developing our data center business.

Thank you Jason I am pleased to present <unk> financial results for the second quarter of 2025.

For ease of reference we have highlighted key metrics on slide eight which presents a snapshot of key financial and operating metrics for the second quarter.

During the second quarter, Ryan increased itself mining catastrophe from $33 seven extra cash to $35 four extra cash representing a 5% increase over the course of the quarter, while global hash rate rose by 9% in the same period.

Bryan produced 1426 six points in the second quarter, a slight decrease as compared to the 1530 bitcoin produced in the prior quarter driven.

Driven by the global network hash rate growing at a greater pace than rise deployed hash rate given our shift in strategic focus to developing our data center business.

Colin Yee: Year to date for 2025, we have increased Bitcoin holdings per million fully diluted shares from 44.3 to 45.9, representing a Bitcoin yield of 3.7% through the period ended June 30, 2025. For the second quarter, Riot reported a total revenue of $153 million as compared to $161.4 million for the previous quarter, a 5% decrease quarter over quarter, primarily driven by lower Bitcoin production due to global hash rate increasing at a faster rate than our self-mining hash rate. Gross profit for the second quarter was $70.3 million as compared to a gross profit of $73.6 million for the prior quarter. Gross margin in the second quarter equaled 46%, flat with the prior quarter. Net income for the second quarter was $219.5 million or $0.65 per share, compared to a net loss of $296.4 million or $0.90 per share for the prior quarter.

Year to date for 2025, we have increased the quaint holdings per million fully diluted shares from $44 three to $45 nine representing a <unk> yield of three 7% through the period ended June 32005.

For the second quarter, Bryan reported total revenue of $153 million as compared to $161 4 million for the previous quarter.

A 5% decrease quarter over quarter, primarily driven by lower production due to global hash rate, increasing at a faster rate than our self mining hatch rates.

Gross profit for the second quarter was $70 3 million as compared to gross profit of $73 6 million for the prior quarter.

Gross margin in the second quarter equaled, 46% flat with the prior quarter.

Net income for the second quarter was $219 5 million or <unk> 65 per share compared to a net loss of $296 4 million or <unk> 90 per share for the prior quarter.

Colin Yee: This net income was primarily driven by marked market adjustments due to the quarter-end appreciation in Bitcoin price and marketable securities totaling $477 million. As a reference, the Bitcoin price at the end of the first quarter was $82,534, while the price at the end of the second quarter was $107,174, resulting in a marked market upward adjustment of $470.8 million for the quarter. Net income for the quarter also included a $158.1 million loss on contract settlement as part of the Rhodium acquisition, depreciation and amortization expense of $83.2 million, non-cash stock-based compensation expense of $30.1 million, and was positively impacted by the release of $26 million in restricted cash associated with the post-closing dispute settlement with Northern Data.

This net income was primarily driven by mark to market adjustments due to the quarter and depreciation and disciplined price and marketable securities totaling $477 million.

As a reference the bitcoin price at the end of the first quarter was $82534, while the price at the end of the second quarter was $107174, resulting in a mark to market upward adjustment of $478 million for the quarter.

Net income for the quarter also included a $158 1 million loss on contract settlement as part of the rhodium acquisition depreciation and amortization expense of $83 2 million.

Noncash stock based compensation expense of $30 1 million and was positively impacted by the release of $26 million in restricted cash associated with the post closing dispute settlement with northern data.

Colin Yee: Non-GAAP adjusted EBITDA for the second quarter was $495.3 million as compared to non-GAAP adjusted EBITDA loss of $176.3 million for the prior quarter, which included $470.8 million in unrealized gain on Bitcoin held. Cash SG&A for the quarter was $45.8 million, including one-time litigation expenses of $14.3 million and advisory fees of $2 million. Excluding these one-time expenses, Riot's cash SG&A expenses equal $29.5 million at the low end of our prior guidance of a run rate of $30 to $33 million per quarter for 2025. For the second quarter, Bitcoin mining revenue totaled $140.9 million, in line with the prior quarter Bitcoin mining revenue of $142.9 million. Bitcoin mining gross margin for the quarter was 50%, an increase from 48% in the prior quarter. This margin expansion was driven by a higher Bitcoin price.

non-GAAP adjusted EBITDA for the second quarter was $495 3 million as compared to non-GAAP adjusted EBITDA loss of $176 3 million for the prior quarter, which included $478 million in unrealized gain on bitcoin helps.

Cash SG&A for the quarter was $45 8 million, including one time litigation expenses of $14 3 million and advisory fees of $2 million.

Excluding these one time expenses, Brian cash SG&A expenses equaled $29 $5 million at the low end of our prior guidance of a run rate of $30 million to $33 million per quarter for 2025.

For the second quarter Bitcoin mining revenue totaled $140 9 million in line with the prior quarter pick one mining revenue of $142 9 million.

Yeah quite mining gross margin for the quarter was 50% an increase from 48% in the prior quarter. This margin expansion was driven by higher bitcoin price.

Colin Yee: Most notably, Riot's year-over-year hash rate utilization increased from 61% to 87%, demonstrating our strategic focus on improving operations across all of our sites, even as we significantly scaled our operations and now positioning us among the most efficient operators in the industry. Direct costs to mine, excluding depreciation in the second quarter, totaled $48,992 per Bitcoin, of which power costs amounted to $37,767 per Bitcoin, or 77% of total direct costs per Bitcoin. Direct non-power costs, which include direct labor, minor insurance, minor and minor related equipment repairs, land lease, property taxes, network costs, and other utility expenses, totaled $11,225, or 23% per Bitcoin mined, increasing quarter over quarter when direct non-power costs accounted for 18% of total costs.

Most notably rents year over year hatchery utilization increased from 61% to 87% demonstrating our strategic focus on improving operations across all of our sites, even as we significantly scaled our operations and now positioning us among the most efficient operators in the industry.

Direct cost of mine.

Excluding depreciation in the second quarter totaled $48992 per bit coin.

Of which power costs amounted to $37767 per bitcoin or 77% of total direct cost per bit coin.

Direct non power costs, which include direct labor minor insurance minor and minor related equipment repairs land lease property taxes network costs and other utility expenses totaled $11225 or 23% perfect one mine.

Increase in quarter over quarter, when direct non power costs accounted for 18% of total costs.

Colin Yee: This increase was almost entirely attributed to the one-year anniversary of the completion of phase one construction at Corsicana and the resulting property tax bill assessment, which totaled $3.8 million for the quarter, adding an additional $2,650 per Bitcoin in direct non-power costs. We anticipate this cost will remain constant at $1.7 million per quarter going forward in our direct non-power costs. Despite this increase in our direct cost to mine, gross profit per Bitcoin mined for the quarter remained in line with the prior quarter, given the higher average price per Bitcoin seen in the second quarter. I would now like to turn the call over to Jason Chung, EVP of Corporate Development and Strategy.

This increase was almost entirely attributed to the one year anniversary of the completion of phase one construction at Corsicana, and the resulting property tax bill assessments, which totaled $3 8 million for the quarter.

Adding an additional $2650 per bit coin indirect non power costs.

We anticipate this cost will remain constant at $1 $7 million per quarter going forward and our direct non power costs.

Despite this increase in our direct cost of mine gross profit perfect Queen mine for the quarter remained in line with the prior quarter, given the higher average price per bit quaint as seen in the second quarter.

I would now like to turn the call over to Jason Tom EVP of corporate development and strategy.

Jason Les: Thank you, Colin. As we continue to develop our data center business, we believe that providing greater clarity on our Bitcoin mining business on a standalone basis is important information for the market. On page 11 of our second quarter earnings presentation, we have outlined the underlying run rate profitability of our Bitcoin mining business for the second quarter of 2025. The column outlined in the middle of the slide provides a step-by-step walkthrough of key profitability drivers for our Bitcoin mining business, ultimately culminating in run rate EBITDA for the quarter. Top line revenue drivers include the average global network hash rate, Riot's average operating hash rate, average network hash price, and our total Bitcoin production for the quarter, which, when taken together, results in a reported second quarter Bitcoin mining revenue of $140.9 million.

Thank you Colin.

As we continue to develop our data center business, we believe that providing greater clarity on a bitcoin mining business on a standalone basis is important information for the market.

On page 11 of our second quarter earnings presentation, we have outlined the underlying run rate profitability of a bitcoin mining business for the second quarter of 2025.

The column outlines in the middle of the slide provides a step by step walkthrough of key profitability drivers for a bitcoin mining business.

Ultimately, culminating in run rate EBITDA for the quarter.

Topline revenue drivers include the average global network hash rate.

Riots average operating harsh rate at.

Average network hash price and our total bitcoin production for the quarter.

When taken together resulted in a reported second quarter bitcoin mining revenue of $149 million.

Jason Les: As highlighted on the prior slide, total direct cost per Bitcoin for the second quarter was $48,992, and when applied to the 1,426 Bitcoin we produced during the quarter, it equates to our reported Bitcoin mining gross profit of $71 million, or 50% on a gross profit margin basis. In order to determine run rate cash SG&A for the quarter, we exclude from total SG&A the impact of non-cash charges, which are primarily comprised of stock-based compensation, cash SG&A related to our engineering business, and non-recurring expenses, which are primarily litigation and advisory related. Run rate EBITDA for our Bitcoin mining business for the second quarter equaled $45.6 billion, representing a 32% margin. These results are based on the average network hash price for the second quarter of $51 per petahash per day, while hash price today is currently closer to $60 per petahash per day.

As highlighted on the prior slide total direct cost per bit coin for the second quarter was $48992.

And when applied to the 1426 bitcoin, we produced during the quarter equating to a reported bitcoin mining gross profit of $71 million.

Over 50% on a gross profit margin basis.

In order to determinate run rate cash SG&A for the quarter, we exclude from total SG&A the impact of noncash charges, which are primarily comprised of stock based compensation.

Cash SG&A related to our engineering business.

And nonrecurring expenses, which are primarily litigation and advisory related.

Run rate EBITDA for a bitcoin mining business for the second quarter equaled $45 6 billion.

Representing a 32% margin.

These results are based on the average network cash price for the second quarter of $51 per <unk> per day.

<unk> today is currently closer to $60 per <unk> per day.

Jason Les: Our Bitcoin mining business demonstrates strong leverage to changes in hash price, and as an illustration, applying current hash price of approximately $60 per petahash per day to the second quarter results would have resulted in a 70% increase in our run rate EBITDA for the quarter. At the same time, we continue to focus on controlling and reducing costs. Non-cash charges, which are primarily comprised of stock-based compensation, are temporarily elevated at present but will be meaningfully and dramatically reduced from mid-next year onwards, and we will provide more detailed guidance on the expected reduction in stock-based compensation in the next quarter. As Colin previously mentioned, litigation expenses represent the bulk of our non-recurring cash expenses for the quarter, constituting $14.3 million out of the total $16.3 million. While litigation expenses can be difficult to forecast, we continue to work to reduce these expenses as well.

Our bitcoin mining business demonstrated strong leverage to changes in <unk>.

And as an illustration applying current hedge price of approximately $60 per potash per day to the second quarter results would have resulted in a 70% increase in our run rate EBITDA for the quarter.

At the same time, we continue to focus on controlling and reducing costs noncash charges, which are primarily comprised of stock based compensation are temporarily elevated at present, but will be meaningfully and dramatically reduced from bid next year onwards, and we will provide more detailed guidance on the expected reduction.

And stock based compensation in the next quarter.

As Colin previously mentioned litigation expenses represent the bulk of our nonrecurring cash expenses for the quarter constituting $14 $3 million out of the totaled $16 3 million.

While litigation expenses can be difficult to forecast, we continue to work to reduce these expenses as well for instance, our recent acquisition of rhodium assets and settlement agreement during the quarter have eliminated litigation costs associated with this dispute.

Jason Les: For instance, our recent acquisition of Rhodium's assets and settlement agreement during the quarter have eliminated litigation costs associated with this dispute. It is important to keep in mind that these results are specific to our second quarter and that historically, the third quarter has been the period during which we have typically seen the greatest reduction in direct costs and therefore the greatest increase in profitability, as that quarter is when we have typically been able to most fully employ our power strategy. I will now turn the call back over to Colin Yee to continue with the second quarter financial update.

It is important to keep in mind that these results are specific to our second quarter and that historically the third quarter has been the period during which we have typically seen the greatest reduction in direct costs and therefore, the greatest increase in profitability.

That quarter is when we have typically been able to most fully employed on a power strategy.

I will now turn the call back over to colony to continue with our second quarter financial update.

Colin Yee: Thanks, Jason. Before diving into the financial results of our engineering business for the quarter, it would be helpful to discuss the underlying significant strategic benefits that this business brings to Riot. Our engineering business provides critical long lead time items directly applicable to developing large-scale data center infrastructure. By directly controlling this business, we can ensure timely, cost-competitive availability of critical electrical components, representing a key competitive advantage in planning for ongoing development of both our Bitcoin mining and data center businesses at a time when other developers face the supply constraints. Further, through our acquisition of E48 Solutions last year, the engineering business also brings added in-house expertise in commissioning, operating, and maintaining electrical infrastructure, allowing us to better maintain existing equipment, which reduces downtime, and extending the lifecycle of our equipment, which reduces additional CapEx spend.

Thanks, Jason.

Before diving into the financial results of our engineering business for the quarter. It would be helpful to discuss the underlying significant strategic benefits that this business brings to riots.

Our engineering business provides critical long lead time items directly applicable to developing large scale data center infrastructure.

Directly controlling this business, we can ensure timely cost competitive availability of critical electronics electrical components, representing a key competitive advantage and planning for ongoing development of both our bitcoin mining and datacenter businesses at a time when other developers.

Supply constraints.

Further through our acquisition of <unk> solutions last year. The engineering business also brings added in house expertise in commissioning operating and maintaining electrical infrastructure.

Allowing us to better maintain existing equipment, which reduces downtime and extending the lifecycle of our equipment, which reduces additional capex spend.

Colin Yee: Direct savings to Riot on CapEx spend associated with ESS Metron since its acquisition in December 2021 already totaled $18.5 million to date, and we anticipate additional ongoing cost savings well into the future. Now, let's dive into the financials. During the quarter, the engineering business achieved a record in order bookings, taking our backlog to $118.7 million and setting the stage for a strong second half of 2025. During the quarter, engineering revenue totaled $10.6 million, a 14% decrease relative to the prior quarter revenue of $13.9 million. Total revenue excludes $5 million of intercompany purchases made in the second quarter by Riot for CapEx. With that, I would now like to turn the call back over to Jason Les.

Direct savings to riot on Capex spend associated with DSS Metro since its acquisition in December 2021 already totaled $18 $5 million to date, and we anticipate additional ongoing cost savings well into the future.

Now, let's dive into the financials.

During the quarter the engineering business achieved a record in order bookings, taking our backlog to $118 7 million and setting the stage for a strong second half of 2025.

During the quarter engineering revenue totaled $10 6 million.

14% decrease relative to the prior quarter revenue of $13 9 million.

Total revenue excludes $5 million of intercompany purchases made in the second quarter by Ryan for Capex.

With that I would now like to turn the call back over to Jason West.

Jason Les: Thank you, Colin. As I discussed in my opening remarks, Riot's strategy is to maximize the value of the megawatts that we currently have readily available. With the closing of the Rhodium asset acquisition during the second quarter, we now have access to an additional 125 megawatts of power capacity at our Rockdale facility. Following careful evaluation, we determined that the optimal use for this additional capacity in the immediate term is to upgrade it to support enhanced Bitcoin mining use. As such, we have recently entered into purchase orders with MicroBT for new miners to be deployed at both Rockdale and Kentucky. In total, this order consists of 10 exahash of MicroBT's most efficient miner, the M60S++, with an efficiency rating of 15.5 joules per terahash. At current hash prices, coupled with Riot's low cost of energy, we anticipate a relatively quick payoff period on this purchase.

Thank you Colin.

As I discussed in my opening remarks, right strategy is to maximize the value of the megawatts that we currently have readily available.

With the closing of the rhodium asset acquisition during the second quarter. We now have access to an additional 125 megawatts of power capacity at our Rockdale facility.

Following careful evaluation, we determined that the optimal use or this additional capacity in the immediate term is to upgrade it to support enhanced bitcoin mining use.

As such we have recently entered into purchase orders with micro <unk> for new miners to be deployed at both Rockdale and Kentucky and.

In total this order consists of 10 Exxon has a micro bts most efficient miner, <unk> plus plus with an efficiency rating a $15 five tools <unk> ash at current <unk> prices, coupled with <unk> low cost of energy, we anticipate a relatively quick payoff period on this purchase.

Jason Les: Given the attractive economics and higher valuation multiples associated with data center leases to high-quality tenants, our long-term goal for this additional capacity is to transition it to data center use when appropriate. These capital expenditures are fully funded through year-end 2025 with Riot's current cash on hand. As a result of this increase in 2025 CapEx, we are raising Riot's fourth quarter 2025 hash rate forecast from 38.4 exahash to 40 exahash, representing a year-over-year hash rate growth of 26%. A portion of the new miner order previously highlighted will be deployed during the first quarter of 2026, and as such, we are also providing an initial first quarter 2026 hash rate forecast of 45 exahash.

Given the attractive economics, and higher valuation multiples associated with data center leases to high quality tenants. Our long term goal for this additional capacity is to transition yet to data center use when appropriate.

These capital expenditures are fully funded through year end 2025 with riots current cash on hand.

As a result of this increase in 2025 Capex, we are raising REIT fourth quarter 2025 highest rate forecast from $38 four extra half to $40.

Representing a year over year harsh rate growth of 26%.

A portion of the new minor order previously highlighted will be deployed during the first quarter of 2026 and as such we are also providing an initial first quarter 2026th highest rate forecast of 45 extra cash.

Jason Les: This pace of hash rate growth is anticipated to allow Riot to be our approximate 4% share of the global Bitcoin network into the first quarter of 2026, while we continue to focus on the development of our data center business. In January 2025, Riot formally announced our pivot to utilize the available 600 megawatts of power at Corsicana for data centers that serve high-performance computing.

This pace attach rate growth is anticipated to allow Ryan.

Our approximate 4% share of the global Bitcoin network into the first quarter of 2026, while we continue to focus on the development of our data center business.

In January 2025 four.

<unk> formally announced our pivot to utilize the available 600 megawatts of power at Corsicana for data centers that serve high performance computing and.

Jason Les: In just seven months, Riot has accomplished the following: one, engaged Altman Salon to perform a comprehensive evaluation of the Corsicana site; two, expanded our board to include key data center and infrastructure development expertise; three, engaged financial advisors to assist in our go-to-market strategy, financing, and strategic partnership exploration; four, continued development of the 600 megawatt substation at Corsicana, with 400 megawatts on track for the first quarter of 2026 and the second 200 megawatts expected to come online in the second half of 2026; five, building internal expertise, recruited and hired Jonathan Gibbs as Chief Data Center Officer, along with other veteran data center talent; and six, progressing on the basis of design for our data centers.

In just seven months why it has accomplished the following.

One engaged <unk> alone to perform a comprehensive evaluation of the course of the Tennessee two expanded our board to include key data center and infrastructure development expertise.

Engaged financial advisors to assist in our go to market strategy financing and strategic partnership exploration.

For continued development of the 600 megawatt substation at Corsicana with 400 megawatts on track for the first quarter range from the six and the second 200 megawatts expected to come online in the second half of 2026.

Five building internal expertise recruited and hired Jonathan gifts as Chief Data Center officer, along with other veteran datacenter talent and fix progressing on the basis of design for our data centers.

Jason Les: All of these steps are being taken in a methodical, step-by-step manner in order to put us in the best position possible to secure a lease with a tenant and build a sustainable data center business. Further, when combined with our Bitcoin mining operations and resulting ability to monetize power land, as well as a strong balance sheet, we are well-positioned to expand our power portfolio further as attractive opportunities arise. Building a world-class data center team starts with the right leadership. In June, Jonathan Gibbs joined Riot as our Chief Data Center Officer, bringing more than 15 years of global experience leading end-to-end data center development and operations. Throughout his career, Jonathan has driven multiple aspects of leading-edge data center development, spanning capital planning, infrastructure delivery, operations, and customer engagement across North America, Europe, and Asia.

All of these steps are being taken in a methodical step by step manner in order to put us in the best position possible to secure lease with a tenant and build a sustainable data center business.

Further when combined with our bitcoin mining operations, and resulting ability to monetize powered land as well as our strong balance sheet, we are well positioned to extend our power portfolio further as attractive opportunities arise.

Building a world class data center team starts with the right leadership.

In June Jonathan Gibbs joined Ryan as our Chief Data Center officer, bringing more than 15 years of global experience, leading end to end data center development and operations.

Throughout his career, Jonathan is driven multiple aspects of leading edge data center development spanning capital planning infrastructure delivery operations and customer engagement across North America, Europe and Asia.

Jason Les: Jonathan has led cross-functional teams responsible for design, construction, procurement, critical operations, ESG, EHS, and sales engineering, and has successfully led development of over one gigawatt of capacity, representing more than $17 billion in global investment. Most recently, he served as Executive Vice President of Product Delivery at Prime Data Centers, overseeing the execution of hyperscale and enterprise data centers across the United States. Having the right expertise and experienced leadership in place is a critical step towards engaging potential data center tenants and negotiating leases from a position of credibility and strength. As highlighted on the prior slide, building internal expertise represents a key milestone in the ongoing development of our data center business, and with Jonathan now in position leading the team, we continue to aggressively push forward in completing our basis of design and ultimately securing a lease in a manner that maximizes value for Riot shareholders.

Jonathan has led cross functional teams responsible for design construction procurement critical operation ESG, EHS and sales engineering and have successfully led development of over one gigawatt of capacity representing more than $17 billion in global investment.

Most recently he served as executive Vice President of product delivery at Prime data centers overseeing the execution of Hyperscale and enterprise data centers across the United States.

Having the right expertise and experienced leadership in place is a critical step towards engaging potential data center tenants and negotiating leases from a position of credibility and strength at.

As highlighted on the prior side building internal expertise represents a key milestone in the ongoing development of our data center business and with Jonathan now in position, leading the team we continue to aggressively push forward and completing our basis of design and ultimately securing a lease in a manner that maximizes.

Value for shareholders.

Jason Les: We are excited to have Jonathan at the helm of our data center platform and look forward to sharing more of his team's progress and vision in the quarters ahead. Altman Salon's feasibility study identified the footprint of our existing site as a potential complicating factor to fully utilizing the entire one gigawatt of power availability at Corsicana for data center use in a lowest development cost way due to the different density requirements in comparison to Bitcoin mining. We quickly moved to address this, and in May of this year, we announced that Riot acquired a 355-acre parcel, expanding our available footprint for additional development. In July, Riot acquired a second 238-acre parcel adjacent to the previously announced 355-acre parcel, creating a 593-acre contiguous collection of land in close proximity to our existing site. Collectively, Riot now controls 858 acres of potential development area in Corsicana.

We are excited to have Jonathan at the helm of our data center platform and look forward to sharing more of his team's progress ambition in the quarters ahead.

<unk> loans feasibility study identified the footprint of our existing site.

Potential complicating factor to fully utilizing the entire one gigawatt of power availability at Corsicana for data center use in a lowest development cost way due to the different density requirements and comparison to bitcoin mining.

We quickly moved to address this and in May of this year, we announced that REIT acquired a 355 acre parcel expanding our available footprint for additional development.

In July right acquired a second 238 acre parcel adjacent to the previously announced 355 acre parcel, creating a 593 acre contiguous collection of land in close proximity to our existing site.

Collectively right now controlled 858 acres of potential development area in parts of Canada.

Jason Les: Our goal is to assemble a portfolio that ensures we have maximum flexibility to accommodate any design specifications and requirements of potential tenants. We are frequently asked about our time-to-market strategy and the quote unquote "window of opportunity" that we see. Our observation of market dynamics suggests that power availability will remain the key constraining factor to the explosive demand for data center development that we are witnessing and that these dynamics will remain in place for many years to come. On page 20 of the earnings presentation, there are two charts. The chart on the left-hand side of this slide demonstrates from 2008 to 2023, US on-grid energy demand growth was nearly flat, resulting in minimal investments into grid infrastructure upgrades.

Our goal is to assemble a portfolio that insurers, we have maximum flexibility to accommodate any design specification and requirements of potential tenants.

Okay.

We are frequently asked about our time to market strategy and the quote unquote window of opportunity that we see.

Our observation of market dynamics suggest that power availability will remain the key constraining factor to the explosive demand for data center development that we are witnessing and that these dynamics will remain in place for many years to come.

On page 20 of the earnings earnings presentation. There are two charts. The chart on the left hand side of this slide demonstrates from 2008 to 2023 U S on great energy demand growth with nearly flat, resulting in minimal investments integrated infrastructure upgrades.

Jason Les: Contrast that with projections of 2.2% compounded annual growth in demand for the next five years, representing a greater than 10x increase in annual demand relative to the prior 15-year period and demonstrating a significant and growing gap between this increased demand and more limited growth in supply. Concurrent to this growing gap in demand for power and relative to supply, timelines to procure power in key markets across the United States are significant, with analysts pointing to lead times in the Dallas and Austin markets, where our Corsicana and Rockdale sites are located, of 36 and 42 months, respectively. Riot's fully permitted and readily available power located in important in-demand markets positions us to be in the right place at the right time to capitalize on these market dynamics to the benefit of our shareholders.

Contrast that with protections of two 2% compounded annual growth in demand for the next five years, representing a greater than 10 X increase in annual demand relative to the prior 15 year period, and demonstrating a significant and growing gap between this increased demand.

And more limited growth in supply.

Concurrent to this growing gap in demand for power and relative to supply.

<unk> to procure power in key markets across the United States are significant with analysts pointing to lead times, and the Dallas and Austin markets, where our corsicana in Rockville site for located up 36% and 42 months respectively.

Right fully permitted and readily available power located in important in demand markets positions us to be in the right place at the right time to capitalize on these market dynamics to the benefit of our shareholders.

Jason Les: In closing, we have many advantages that have put us in an incredible position because we offer a unique combination of significant scale of readily available power capacity in key high-demand jurisdictions, experienced, credible hyperscale data center leadership and development capability, strong balance sheet underpinned by more than 19,000 Bitcoin and $330 million in cash, and significant access to capital markets, large-scale efficient Bitcoin mining operations generating hundreds of millions of dollars in revenues and cash flows, and battle-hardened and experienced management and operations teams. With this framework, our mission is clear: Riot will maximize value across our entire power portfolio with a view to ensuring full utilization of our available power capacity and pipeline, leaving no stranded capacity behind, aggressively shift power capacity towards data centers, strategically expand our power assets utilizing Bitcoin mining where advantageous, and increase our shareholders' exposure to value-accreting assets.

In closing we have many advantages that have put us in an incredible position because we offer a unique combination of.

Significant scale of readily available power capacity in key high demand jurisdictions experienced credible Hyperscale data center leadership in development capability.

<unk> balance sheet underpinned by more than 19000, bitcoin and $330 million in cash and significant access to capital markets large scale efficient mining operation generating hundreds of billions of dollars in revenues and cash flows and.

Ardent and experienced management and operations teams.

With this framework our mission is clear right will maximize value across our entire power portfolio with a view to ensuring full utilization of our available power capacity and pipeline, leaving no streaming capacity behind aggressively shift power capacity towards data centers.

Strategically expand our power assets, utilizing bitcoin mining, where advantageous and increase our shareholders' exposure to value accretive assets.

Jason Les: We are strategically positioned at the confluence of surging compute demand and Bitcoin growth, offering compelling potential for shareholder value creation. We will now open the call up for questions. Operator.

We are strategically positioned at the confluence of searching compute demand and bitcoin growth offering compelling potential for shareholder value creation, we will now open the call up for questions operator.

Operator: Thank you. Ladies and gentlemen, if you'd like to ask a question at this time, you will need to press star 11 on your touchdown telephone and wait for your name to be announced. To withdraw your question, simply press star 11 again. Please stand by while we compile the Q&A roster. Now, first question coming from the lineup. Greg Lewis with BTIG. You'll have his announcement.

Thank you.

Ladies and gentlemen, if you'd like to ask a question at this time, you will need to press star one on your Touchtone telephone and wait for your name to be announced to withdraw your question simply press Star one again.

Please standby will be compiled Kennedy boss Sir.

And our first question coming from the line of Greg Lewis with <unk>. Your line is now open.

Greg Lewis: Yes, thank you, and good afternoon, and thank you for taking my questions. You know, there's definitely a lot to choose through on the HPC opportunity ahead for Riot, but I did want to ask about the decision. It was clearly a good quarter for generating Bitcoin, but clearly from the action, we took that Bitcoin generation to really, you know, we sold that to monetize it. Could you talk a little bit about that decision to do that and how you're thinking about the HODL strategy in the back half of the year or even longer term?

Okay.

Yes, Thank you and good afternoon, and thank you for taking my questions.

There's definitely a lot to chew through on the HBC opportunity ahead for riot, but I did want to ask.

About the decision.

It was clearly a good quarter for generating bitcoin.

But.

Clearly from the action.

We took that bitcoin generation to really.

We sold that to monetize that could could you talk a little bit about that decision to do that and how youre thinking about.

<unk> strategy.

In the back half of the year or even longer term.

Jason Chung: Hey, thanks for the question, Greg. This is Jason Chung. Maybe I'll take a stab at that one. So I think this quarter is an interesting representation of how we think about our financing strategy and the different levers available to us. And just looking at, you know, for the past quarter, the two levers that we exercised most heavily, one was the sales of our Bitcoin production, and the second was leaning into our Bitcoin stash to borrow and enter into the Coinbase facility for $200 million. The sale of Bitcoin production allows us to more than cover our operating costs and therefore frees up the additional capacity or minimizes our requirement to issue into the ATM and really allows us to focus any financing raised through that very specifically towards growth opportunities, which we believe are going to be value accretive to our shareholders.

Hey, Thanks for the question Greg This is Jason so maybe I'll take that.

That one so.

I think this quarter is interesting representation of how we think about our financing strategy and the different levers available to us.

And just looking at for the past quarter. The two levers that we exercised most heavily one was sales of our bitcoin production on.

The second was leaning into our bitcoin stashed to borrowing enter into the Columbus facility for $200 million.

The sale of Bitcoin production allows us to more than cover our operating costs.

And therefore frees up.

Additional capacity or minimize the requirement to issue to the ATM.

It really allows us to focus any financing raised through that very specifically towards growth opportunities, which we believe we're going to be value accretive.

Jason Chung: And so I think that's kind of how we think about things for the quarter and probably a good reflection of how we currently think about things as well. As Bitcoin prices increase, that does give us additional room or comfort around our leverage levels and the ability to consider expanding the amount of financing we draw upon there as well. So I think as we continue to see how Bitcoin prices evolve, you'll see us continue to take advantage of different market conditions as we think about what's optimal from a capital perspective for the quarter.

Our shareholders.

And so I think that's kind of how we think about the thought about things for the quarter and probably a good reflection of how we currently think about things as well.

As bitcoin prices increase that does give us additional room.

For around our leverage levels and the ability to consider extending.

The amount of financing we draw upon there as well so I think as we continue to see how big complexity vaults and you'll see us continue to take advantage of market conditions.

As we think about what's optimal from a capital perspective for the quarter.

Yes.

Greg Lewis: OK, super helpful. And then just realizing you're probably limited in what you can say, maybe we can talk a little bit about what we're seeing in the market in terms of the available power transactions or availability for electricity, signing for with HPC. You know, if you could kind of talk to the pricing dynamics, you know how things have been trending. You know, I feel like more recently it was kind of in the $120 megawatt range, some of the things that we've been hearing. Kind of curious if that's kind of where you're hearing the market is.

Okay Super helpful and then just real.

Youre probably limited in what you can say, maybe we can talk a little bit about what we're seeing in the market in terms of.

The available power transactions or availability electricity signing tour with HP say.

If you could kind of talk to.

The pricing dynamics how.

Things have been trending.

I feel like more recently it was kind of in the $120 a megawatt.

Range has some of the things that we've been hearing kind of curious.

That's kind of where you are hearing in the market is and then.

Greg Lewis: And then really the question I have is, as we think about sizing, is there a premium that you're seeing in terms of having larger amounts of power available, i.e., if we're looking at a couple hundred megawatt power deal versus, say, a half gig plus, is there any kind of premium for that larger power deal just in thinking about how a potential transaction could shake out?

Really the question I had is.

As we think about sizing is there a premium that you are seeing in terms of having larger amounts of power available I E.

Looking at a couple of hundred megawatts power deal versus say a half gig plus is there any kind of premium for that.

Larger power deal just.

And thinking about.

How potential transaction could shake out.

Jason Les: Yeah, Greg, this is Jason Less now. I think at a high level, we're seeing very robust demand in the data center market. Our view continues to be that what exists out there in terms of power and infrastructure is really not close to sufficient to meet what's forecasted demand. And hyperscalers continuing to announce higher levels of CapEx budgets, they have serious demands for more data center capacity that really cannot be satisfied by new power that's expected to be available. What we see is the implications of the AI arms race being very clear here. There's a trend for more compute demand, and that's very clear. So we believe demand is going to continue to be robust, and we are building a business here, building a platform to be able to serve it.

Yes, Greg this is Jason less now.

I think at a high level, we're seeing very robust demand in the data center market. Our view continues to be that what exist out there in terms of power and infrastructure is really not close to sufficient to meet what is forecasted demand.

Hyper scaler continuing to announce.

Higher levels of Capex budgets, they have serious demands for more data center capacity that really cannot be satisfied by new power that expected to be available.

What we see is the implications of arms race team very clear here. There is a trend for more compute demand. That's very clear. So we believe demand is going to continue to be robust and we are building a business here building the platform to be able to serve it.

Jason Les: As far as monthly rates go, I think there's a lot of different components that go into what an ultimate lease might be. And it's important to look at a deal like this as some of all of its parts, maybe instead of just a single metric. You'll see a range of rental rates, and those will have somewhat of a correlation to the type of tenant that you're getting. There's a bit of credit risk often built into what those monthly rates are. And you'll see term and other components of these agreements. So I think it's important to look at these in all of the parts that comprise them and not necessarily just what that monthly rate would be. It can be a range, and other components could enhance that deal or make that deal worse off from the perspective of the lessor.

As far as monthly rates go I think there's a lot of.

<unk> components that go into.

What an ultimate lease might be and if it.

Important to look at a deal like this.

As a sum of all of its parts, maybe instead of just a.

A single metric Youll see a range of rental rates and those will have somewhat of a correlation to the type of tenant that youre getting there is a bit of credit risks often built into what those market rates are and youll see term.

Other components of these agreements.

It's important to look at these.

And all of the parks that comprise them and not necessarily just what that monthly rate you'd be it can be a range and other components.

Enhanced that deal or make that deal Warsaw from the perspective of the lessor.

Jason Les: Now, I think the last part of your question was, is there a premium for large-scale power? I don't know if I can comment right now if there's a premium for that power, but what I can say is that there's a premium of interest for large-scale power. So for tenants, everyone is massively scaling. Hyperscalers are looking to take down gigawatts and beyond now. And as everyone else increases their demands for compute, we're now seeing neoclouds taking down capacity at levels that hyperscalers once did, and now enterprise tenants taking down capacity at those significant levels as well. So what any long-term growth-oriented tenant is going to be thinking about is their pipeline for expanding.

I think the last part of your question was is there a premium for large scale power.

Hi.

Don't know if I can comment right now if there's a premium for that power, but what I can say is that there is a premium of interest or large scale for power so for tenants.

Everyone is massively scaling hyper scaler or looking to take out.

Gigawatts and beyond now and as everyone else increases.

Their demand for our compute we're now seeing new clubs, taking down capacity at levels of Hyperscale once did and now enterprise tenants, taking down capacity at those significant levels as well so what any long term growth oriented tenant is going to be thinking about.

Jason Les: Instead of having to solve a problem for capacity over and over and over again with different providers, what we see is customers who are interested in capacity available beyond just what their initial lease might be. So when you talk about a premium for capacity, that's how we think about it. There's a premium that is, in essence, garnering customer interest because they see an ability to expand beyond just what an additional phase of a development or lease might be. And that we have found is very helpful for having productive discussions.

Is there a pipeline pork sandy sort of having to solve a problem for capacity over and over and over again with different providers. What we see is customers who are interested in.

Yes.

The capacity available beyond just what their initial lease might be so when you talk about a premium for capacity. That's what we see is a premium.

That is in essence.

From a customer interest because that because they see an ability to expand beyond just what additional space of development.

Development or lease might be and that we have found is very helpful for having productive discussions.

Greg Lewis: OK, well, hey, super helpful. Thank you for the time, gentlemen.

Okay.

Okay Super helpful. Thank you for the time gentlemen.

Operator: Thank you. Our next question coming from the lineup. Nick Jones with BRIO Securities. You'll have his announcement.

Thank you our next question coming from the line of.

Nick Johnson with BMO Securities. Your line is now open.

Nick Jones: Thank you, Operator. Good afternoon, everyone. You know, I think it's become clear that Riot's not going to rush to get a deal done, so I want to commend you for your measured approach. But I think in recent months, forming a basis of design has been at the core of Riot's efforts towards the data center side. And so I was wondering if you could provide any detail on what aspects of that document are clearly defined versus ones you may still be working on. I think factors that come to mind are cooling resources, redundancy, security, overall layout. Any color that you can add there would be great. Thank you.

Thank you operator, good afternoon, everyone.

I think it's become clear that it's not going to rush to get a deal done. So I want to commend you for your measured approach, but I think in recent months forming.

Basis of design has been at the core of rights efforts towards the data center side and so I was wondering if you could provide any detail on what aspects of that document are clearly defined versus ones. You may still be working on I think factors that come to mind are cooling resources redundant.

Fee.

Security.

Lay out any any color that you can add there would be great. Thank you.

Jason Les: Yes. So first off, bringing an experienced data center executive like Jonathan Gibbs on board alongside other talent that's been recruited with significant experience in data center development has aided us considerably in building this basis of design. Of course, it is this data center team's project and an objective to accomplish here. And this basis of design is very foundational to being able to go to market. What we're putting together here is the technical strategy design elements that we can then take and then have something concrete to be able to discuss with potential customers, with potential tenants, to ultimately arrive at a more customized design and then a lease. So we see this as one of multiple milestones, but a very key milestone in progressing towards getting a lease here.

Yes, so first off bringing.

An experienced datacenter executive Jonathan gifts onboard alongside other talent that's been recruited with significant experience in data Center development has aided us considerably and building to speak to the design of course. It is this team this datacenter Skus project.

And objective to accomplish here.

And this basis of design.

Very foundational to being able to go to market. What we're putting together here is the technical strategy design elements that we can then take and then have something concrete to be able to discuss with potential customers with potential tenants to ultimately arrive at a more customized design and then I'll leave.

So we see this as one of them.

Multiple milestones, but a very key milestone and progressing towards getting the lease here.

Jason Les: We have been working at this quite a bit, Jonathan and his team has rather, and there's been significant progress made already. We expect that we will be able to complete this basis of design by the end of this quarter, by the end of the third quarter, that is, and be moving on to next steps in our data center strategy.

<unk> been working on this quite a bit Jonathan and his team has rather and theres been significant progress made already.

Expect that we will be able to complete this.

Basis of design by the end of this quarter by the end of the third quarter that is and be moving on to next steps in our data center strategy.

Okay.

Nick Jones: Jason, thanks for all that color. And that reminds me, I want to congratulate Jonathan on his appointment. My second question was, you know, obviously long lead times are a key determining factor in development timelines. So have you submitted any RFPs to contractors? I mean, how much is the tariff landscape ultimately playing into the timing of that? Thank you.

Jason Thanks for all that color and that reminds me I want to congratulate Jonathan on his appointment. My second question was obviously long lead times are a key determining factor in development timelines. So have you submitted any rfps to contractors I mean, how much how much does the tariff landscape ultimately.

Lying into the timing.

Timing of that thank you.

Jason Les: So first, for some of the critical infrastructure that's needed to build this capacity, we have already secured. I'm referring to the 600 megawatt substation that's being built that's expanding the site to one gigawatt. We have already procured that equipment. That equipment is already arriving, and that is going to take our Corsicana site to one gigawatt in 2026. So we are very well positioned on that critical equipment there. As far as other equipment goes, we are pretty confident in the steps that we're taking to prepare for that. We are looking at long lead times for other equipment, but the timelines for these are not surprising to us. That's kind of expected. And the process of procuring these long lead items is already underway. And with Jonathan and his team on board, we feel like we're approaching this in a very strategic way.

So first.

Some of the critical infrastructure that's needed to build this capacity we have already secured.

Referring to the 600 megawatt substation, that's being built that's expanding the site to one gigawatt, we have already procured that equipment that equipment is already arriving and that is going to take our course of kamacite. Two one gigawatt in 2026. So we are very well positioned on that critical equipment there.

As far as other equipment goes.

We are pretty confident in.

The steps that we're taking to prepare for that we are looking at long lead times for other equipment, but the timelines for these are not surprising to us.

That's kind of expected and the process of procuring the following items is already underway.

And.

Jonathan and his team on board, we feel like we're approaching this.

Jason Les: And ultimately, we don't believe that the lead times for an equipment are going to impact our ability to secure a lease.

Very strategic way and.

Ultimately we.

We don't believe that.

The lead times for new equipment is going to impact our ability to securely.

Nick Jones: Guys, thanks for the update. Keep up the good work.

Thanks for the update queued up to go to work.

Operator: Thank you. Our next question coming from the lineup. Darren Absahi with Watt Capital. You'll have his announcement.

Thank you.

Next question coming from the line of Darren <unk> with Roth Capital. Your line is now open.

Darren Aftahi: Hey, guys. Good afternoon. Thanks for taking my question. Just following up on the master site design timeframe being completed by the end of this quarter, can you speak to the potential tenants that you're engaged with? And I guess, like, how critical is that master site design in terms of their willingness to kind of continue negotiating? Said another way, like, is that something that will accelerate negotiations for you, or are there folks that have already kind of parallel diligence in things they need while waiting for that master site design? Then my second question on Rockdale, I know you're upgrading some rigs there, but can you just give us some general long-term thoughts on what that campus potentially could be used for other than Bitcoin mining and kind of where your head's at?

Hey, guys. Good afternoon. Thanks for taking my questions just following up on the on the Master site design timeframe.

Being completed by the end of this quarter.

Can you speak to the potential tenants that youre engaged with.

And I guess like how critical is that master site design in terms of their willingness to kind of continue negotiating said another way like is that something that will accelerate negotiations for you are there folks that are already kind of parallel diligence zing.

Things they need while waiting to that Master site design and then my second question.

On Rockdale I know you are upgrading some some rigs there but can you just give us some general long term thoughts on what that campus potentially it could be used for other than bitcoin mining and kind of where your head's at is that you have.

Darren Aftahi: Is it you have too much to bite off now with Corsicana and it's kind of backburner, or you could do these things simultaneously and potentially market all your power as one campus? Thanks.

Too much to buy.

Now with that of course, the Cana and Thats kind of a back burner or if you could these things simultaneously and potential potentially market on your power is one campus.

Jason Les: Yeah, Darren. So the first part of your question, so one thing I want to make clear is we are making a basis of design that we believe can serve a wider range of customers. It can serve hyperscale customers. It can serve enterprise customers or neocloud customers. What we want to do is maximize our flexibility. I think that's a theme you've heard us talk about on our arranged calls a couple of times now, taking different actions, making moves in order to maximize the flexibility of our site, of our data center, be opportunistic, and secure the best possible deal here. And if you're talking about engaging with serious counterparties, this is the type of information that we would like you to come to the table with in order to advance discussions substantially.

Yes Darren.

So the first part of your question. So one thing I want to.

May clear.

We are making a basis of design that we believe can serve a wider range of customers. It can serve hyperscale customers can serve enterprise customers on neocon customers. While we want to do is maximize our flexibility I think that's a theme you've heard us talk about on our earnings call a couple of times now.

Taking different actions, making moves in order to maximize the flexibility of our site of our data center.

The platform is set.

And secure the best possible deal here.

And if you're talking about engaging with serious counterparties. This is the type of information that they have.

So mark you to come to the table with in order to advance discussions substantially and that's why we viewed the building out of the team here, especially led by Jonathan Gibbs and his Onboarding is very critical in a very important step we've made to building out this platform.

Jason Les: And that's why we view the building out of this team here, especially led by Jonathan Gibbs and his onboarding, as a very critical and a very important step we've made to building out this platform. Now, I can't comment on ongoing discussions. I would say that all types of customers are different and maybe approach conversations in different ways and a different milestone in order to have serious discussions here. So we look forward to sharing more about this with the market as it's completed and being transparent and sharing our milestones and our roadmap to building out our platform here and ultimately securing a lease. With respect to long-term, I'm sorry, with respect to Rockdale, our primary focus is scaling our data center business and maximizing the value of all of our power assets.

I can't comment on.

Ongoing discussions.

I'd say that all types of customers are different and maybe.

Roche conversations.

Different ways.

Yes.

The difference.

Milestone in order to have serious discussions here.

We look forward to sharing more about this with the market as it's completed.

And.

<unk> been transparent in sharing our milestones on our roadmap to building out our platform here at ultimately securing at least with respect to long term I'm, sorry with respect to Rockdale.

Our primary focus is scaling in our data center business and maximizing the value of all of our power assets.

Jason Les: Because of that, because of the economics that you can get with data center leases and how the market values that, data centers are the ultimate ideal use for us for all of our power capacity. What's great about Riot is we have a lot of power capacity to work with. Megawatts alone, which is our available capacity at Corsicana, that represents a very substantial data center campus in its own. At the same time, we are open to doing finding deals at Rockdale as well. I think what we're just doing right now is prioritizing what we see as the best to work with. And as we get our data center platform off the ground and we continue to make more progress, then that makes all of our power assets, that positions all of our power assets in the pipeline for growth of the data center platform ultimately.

Because of that.

Because of the.

The economics that you can get with data center leases and how the market values.

Data centers are the ultimate ideal use for us for all of our power capacity.

What's great about right as we have a lot of power capacity to work with.

So megawatts alone, which is our available capacity corsicana that represents a very substantial.

Data Center campus.

And it's at.

At the same time, we are open to doing.

Finding deals at Rockdale as well I think what we're doing right now is prioritizing what we see as the.

This web and as we get our data center platform uptick off the ground and we continue to make more progress than that makes all of our power assets.

That positions all of our power assets in the pipeline for growth of the data center platform. Ultimately so you can think of our strategy.

Jason Les: So you can think of our strategy as using Bitcoin mining at sites like Rockdale to monetize.That

Using bitcoin mining.

Sites like Rockdale to monetize that power to ensure that no power strength and wasted.

Philip McPherson: power to ensure that no power is drained and wasted, turning that into meaningful cash flows for the company, and then ultimately looking to transition that capacity to data center leases when the time is right.

Turning that into meaningful cash flows of the company and then ultimately looking to transition that capacity to data center leases when the time is right.

Jason Les: Thanks, Jason.

Thanks, Jason.

Colin Yee: Thank you. Our next question coming from the line of Brett Noble with ClientSurface Jail. The line is now open.

Thank you.

Our next question coming from the line of Brad <unk> with anthem Fitzgerald. Your line is now open.

Jason Les: Hey, guys. Thanks for taking my question. Maybe an update on the kind of your Bitcoin mining outlook. I know you guys kind of raised guided swim this year and moved to the first quarter as well. Network hash has kind of been stubbornly continuing to go up. Maybe high level, where do you see network hash going? Is there a level where you think maybe it kind of plateaus a bit? And I know you talked about being 4% share. Is that kind of like a goal that you guys want to maintain for the long term, or how should we think about that?

Hey, guys. Thanks for taking my question.

Maybe.

An update on the kind of bitcoin mining outlook.

Kind of raised guidance for end of this year in the first quarter as well network cash has kind of been stubbornly continuing to go up.

Maybe high level, where do you see network cash going is there a level, where you think maybe it kind of.

That shows a bit and I know you talked about being 4% share is that kind of like a goal that you guys want to maintain for the long term or how should we think about that.

Philip McPherson: I think that the 4% share is not a mandate that we have. That's something that we see ourselves being in just based on the growth that we've outlined and kind of a near-term estimate of global network hash rate in the next 6 to 12 months. But by no means are we intending to always maintain a certain percentage. But going back to the first part of your question, I think Bitcoin miners will face the same types of scaling challenges that data centers are. There's very limited amounts of power. And from what I think we're seeing and what we're excited about is data center customers are paying a lot more for that than Bitcoin miners ultimately would.

I think the 4% share is not a mandate that we have.

Thats something that we see ourselves being in just based on the growth that we've outlined and kind of a near term estimate.

Global network cash rate and the.

The next six to 12 months, but by no means are we intending to always maintain a certain percentage.

But going back to the first part of your question I think between miners will face the same types of scaling the challenges. The datacenters are very limited amounts of power.

I think we're seeing in our excited about as data center customers are paying a lot more for that big reminders ultimately what so while breakpoint miners have other options for power data centers.

Philip McPherson: So while Bitcoin miners have other options for power that data centers don't, I think they will also be constrained in how they scale, which has the potential to have a positive impact on hash price in the future. At Riot, what we're focusing on is maximizing the value across our power portfolio, trying to maximize the value of all of our megawatts, not not straining in any capacity. So what we shared with the growth that we have going on in Kentucky and the hash rate growth that we have in Rockdale, those are moves in accordance with that strategy, and I think represent measured growth of our Bitcoin mining segment. We're looking at approximately 26% year-over-year growth from '24 to '25, and then approximately 10% growth from '25 to 2026.

I think they will also be constrained and how they scale.

The potential to have a positive impact on cash prices in the future.

Yes.

What we're focusing on is maximizing the value across our power portfolio trying to maximize the value of all of our megawatts.

Not training any capacity.

So what we shared with the growth that we got a point on in Kentucky, and the Wall Street growth that we have rockdale.

Those are moves in accordance with our strategy and I think represent measured growth.

Our mining segment, we're looking at approximately 26% year over year growth.

And then.

Approximately 10% growth from 2005 to 2026.

Jason Les: Awesome. On a tough one, and maybe just on the maybe Corsicana, I think a lot of the conversations we've had kind of suggest that is maybe one of, if not the best, potential AI/HPC data center sites out there. Are you guys getting kind of like similar feedback when you guys are looking at potential customers or kind of what to do with maybe the remaining 600 or 400 gigawatt there?

Okay. That's helpful. And then maybe just on the maybe of course, it kind of I think a lot of the conversations we've had.

It kind of suggests that is maybe one of if not the best potential Aig's interstates.

And there are sites out there.

Are you guys getting kind of like similar feedback when you guys are looking at.

Potential customers are kind of what to do with maybe the remaining 600 or four gigawatt there.

Yeah.

Philip McPherson: What we're focused on with launching this data center platform is building a strong foundation. We want to get off on the right foot here. And building that strong foundation means getting the right deal of which we can build the pipeline on top of from the start. Now, that doesn't mean that we need to level that 600 megawatts or sign a lease for all of that 600 megawatts to build that first foundation, that first step to build that strong foundation. We are looking at this capacity and building it out as a phased approach. We see building this out in different segments, and we'll be talking about that more in the future. And the fact that the site has so much capacity means that ultimately there may be one tenant that wants all of that.

What we're focused on with launching this data center platform is building a strong foundation, we want to get off on the right foot here.

And building a strong foundation means getting.

The right deal of what we can build the pipeline on top of from the start now that doesn't mean that we need.

That's 600 megawatts.

On a lease for all of that 600 megawatts to build that first foundation. The first step to build a strong foundation.

We are looking at this.

Capacity and building it out as a phased approach.

We see.

Building this out in different segments.

We're talking about that more in the future.

And the fact that the site has so much capacity means that ultimately there may be one tenant that once all of that I discussed in earlier question. The fact that there's so much growth in one site is.

Philip McPherson: I discussed in an earlier question, the fact that there's so much growth in one site is, we believe, very interesting to lots of customers out there who have a very robust demand forecast. So it's to be determined how this is all segmented out. But we are approaching the market with a design that we believe can serve a wide range of the market: hyperscale customers, enterprise customers, and neoclouds. And what's important to us is getting this off on a solid foundation to start. And then ultimately, like I stated again, there's lots of room to grow here and the potential to do a larger deal from there.

We believe very interesting two loss mass of customers out there who have.

Very robust demand forecast.

No.

It's to be determined how this is all segmented out but we are approaching the market with a design that we believe can serve.

A wide range of the market hyperscale customers enterprise customers and Neo cloud.

<unk>.

What's important to US is getting this off on a solid foundation to start and then ultimately a.

It's fair to get there.

Lots of room to grow here and the potential to do a larger deal from there.

Jason Les: Awesome. Thank you. Really appreciate it.

Awesome. Thank you really appreciate it.

Colin Yee: Thank you. Our next question coming from the line of Paul Golding with Macquarie. Your line is now open.

Thank you.

Our next question coming from the line of Paul Golding with Macquarie. Your line is now open.

Jason Les: Thanks so much. I wanted to ask about Corsicana and drill down to some of the infrastructure components. I noticed in the slide on 2025 CapEx that there's a waterline project expected to be completed in Q2 '26. And just overall looking at the substation development line item for Corsicana, I was wondering if you could expand on any of the infrastructure components for Corsicana that are maybe factoring into the conversation still pending with potential tenant counterparties as opposed to these deals having been signed already. And also just to help us understand the extent to which water access has already been secured, given the water retention pond that you have and the importance of that for HPC and AI liquid cooling. Thank you.

Thanks, So much I wanted to ask about of course, we cannot drill down to some of the infrastructure components.

Notice on the slide on 2025, Capex that there is a water line project expected to be completed in Q2 2006 and just.

Overall looking at the substation development line item for Corso, Ken I was wondering if you could expand on.

Any of the infrastructure components for course of Canada that are maybe factoring into the conversation still pending.

With potential tenants counterparties as opposed to.

These deals having been signed already and also just to help us understand the extent to which water access has already been.

Secured given the water retention ponds that you have.

And the importance of that for HTC and AI liquid cooling. Thank you.

Philip McPherson: So starting on water, Paul, as you noted, we have a significant size retention pond that allows us to use a lot of the water that's just naturally generated on site. It's Texas, but still gets a lot of rain. We have secured the plans and the approvals to build out a waterline. And that will ultimately, that's a part of giving us maximum flexibility to serve customer demands. What we're seeing on the data center technology side is Coin Technologies becoming more and more water efficient as time goes on. In order to be flexible, we didn't want to bank on that. So we're securing enough water that we believe would be ample for a full one-gigawatt development if someone needed that amount of water in order to achieve the cooling strategies that they have or that they require.

So starting on water Paul.

You know that we have a significant cycle coupon and allows us to use a lot of water. This is natural generated on site, it's Texas, but still gets a lot of rain, we have secured the plans and the approvals to build up the water line.

And that will ultimately that's a part of giving us maximum flexibility to serve customer demand, but we're seeing that in the data center technology side.

Is <unk>.

Technology is becoming more and more water efficient as time goes on.

In order to be flexible, we didn't want to bank on that so we're securing enough water that we believed would be ample for a full one gigawatt development.

If someone needed.

That amount of water in order to.

<unk> achieved a <unk> shot issues that they have or that they require.

Philip McPherson: As far as the infrastructure for Corsicana, I think we are in a great position and probably have a considerable leg up on what other data center developers might be at at this stage. We've already made the decision years ago, really, to be procuring this equipment. So it's already coming in now. That's significantly, I think, de-risk the amount, I'm sorry, de-risk the timeline to getting that power online. Also, combined with the fact that we have this approved already, we have FEA for this already, it is all baked in and ready to go. So that, I believe, puts us in a great position when we have conversations with tenants because this power is not theoretical. This power isn't pending certain steps happening. This power is coming in the next six months and scaling up from there.

As far as the infrastructure for Corsicana.

Think we are in a great position.

Probably have a considerable leg up on what other data center developers might be at this stage. We have already made the decision years ago really to be procuring. This equipment. So it's already coming in now that significantly I think de risk the amount.

I am sorry, derisked, the timeline to getting that power online also combined with the fact that we have this approved already we have FDA for this already it is all baked in and ready to go so that I believe puts us in a great position when we have conversations with tenants.

Power is not theoretical as power isn't pending certain steps happening with power is coming in the next six months and scaling up from there.

Jason Les: Great. Thanks. And maybe a follow-on to that. We talked on the call around price, potential pricing in the marketplace, and premiums or premium for demand. You've spoken on the call about data center customer requirements, and that's factoring into this build concept. As you have these conversations, just wanted to verify, is the plan still, or is what you're pursuing still the option to construct the facility and the power infrastructure for these tenants in a yield on cost or build to suit scenario, or are you getting inbounds, or are you considering inbounds where someone else is building it and leasing the power and the infrastructure? Thank you.

Great, Thanks, and maybe a follow on to that.

We've talked on the call around about price potential.

Potential pricing in the marketplace and premiums premiums for demand.

You've spoken on the call about data center customer requirements and that's factoring into the built concept as you have these conversations.

Just wanted to verify is the plan still or is what you're pursuing still the option to construct the facility and the power infrastructure for these tenants.

Yield on costs were build to suits scenario or are you getting inbounds are you considering in balance where someone else's building it and leasing the power and the infrastructure. Thank you.

Philip McPherson: So our philosophy at Riot has been to maximize the value of our assets. And we believe that build to suit model is going to be the best way to maximize the value of our portfolio of assets, especially at Corsicana. That being said, we do not intend on building out the site beyond an initial stage without a lease. We're not looking to build out a site on spec. We believe that by finalizing the design here, understanding what that is for customers, and then being able to take initial steps to get things off the ground, which we already have done with building out the substation and the water, these would be foundational steps in any data center. We are willing to invest in order to get things moving off the ground and getting to the point of getting the lease.

So our philosophy.

At Ryan has been to maximize the value of our assets and we believe that build to suit model is going to be the best way to maximize the value of our portfolio of assets.

Firstly at Corsicana.

That being said.

We do not intend on building up the site.

John.

Initial stage was notable because we're not looking to build out a site on spec, but we believe that.

By finalizing the design here understanding what that is with customers and then being able to take initial steps to get things off the ground, which we already have done with building out the competition in the water. He should be foundational steps any data center, we are willing to invest in order to get things moving off the ground.

And getting to the point of getting the lease, but we are not looking to build to suit a site on spec and take all that risk without having to refinance.

Philip McPherson: But we are not looking to build to suit a site on spec and take on all that risk without having a lease in hand.

Jason Les: Great. Thanks, Jason.

Great. Thanks, Jason.

Colin Yee: Thank you. Our next question coming from the line of Reggie Smith with JP Morgan. Your line is now open.

Okay.

Thank you.

Our next question coming from the line of Reggie Smith with Jpmorgan. Your line is now open.

Jason Les: Hey, Jason. Congrats on the quarter. I guess I'd like to follow up on the last question. And I appreciate you guys wanting to actually build to suit. But I guess my question is, if there's more demand today for people just looking to buy power outright, so if that were your strategy, do you think this plot or your capacity would have been sold now, if that makes sense? I'm trying to figure out, like is the hang-up that or the delay in the deal being done the fact that there may be some haggling over whether a miner just sells power outright versus a build to suit type of situation? And then I have one follow-up question. Thank you.

Hey, Jason Congrats on a quarter.

I'd like to follow up on the last question.

And I appreciate you guys wanting to.

To actually build to suit.

I guess my question is if.

If there is more demand today for people just looking to buy our outright. So my guess is that where your strategy do you think this.

This plateau or your capacity would have been sold now.

If that makes sense I'm trying to figure out like is the hang up debt.

While the delay in a deal being done and the fact that there may be some haggling over weather.

Minor just sales power outright versus a build to suit type situation and I have one follow up question. Thank you.

Philip McPherson: Yeah, Reggie. So we believe what we have is incredibly valuable. And I think all the data that we're seeing in the market on data center leasing validates that belief. So it's important to us to maximize the value of that. If you're talking about doing something like leasing powered land, yes, you know there is a ton of demand for lease-powered land. But the value that you can expect to extract from that is going to be, I think, pretty significantly mismatched with what I think investors are expecting from this type of data center opportunity. With the assets that we have, with the balance sheet that we have, and now with the team that we have, we are in a great position to build a data center platform and be able to pursue the value maximizing approach that we see with this build to suit model.

Yes, rajeev so.

We're really we believe what we have is incredibly valuable and I think all the data that we're seeing in the market on data center only see validates that belief so it's important to us to maximize the value of that.

If youre talking about doing something like leasing power of land.

Yes, there is.

Tenant demand for lease power land, but the value that you can expect to start.

And that is going to be.

Significantly mismatched with what I think investors are expecting from this type of data center opportunity with the assets that we have with the balance sheet that we have and now with the team that we have we are in a great position to build a data center platform and be able to pursue the value maximizing approach.

The we see with this build to suit model.

Philip McPherson: We are open to anything that will maximize the value. So we're not closed off to any type of discussion. But this is the avenue that we see as the best pursuit going forward. And that's why we're approaching things in this manner.

Open to anything that will maximize the value. So we're not closed off to any type of discussion and this is the avenue that we see as the best Prasutanont Importantly, spyware.

We're approaching things.

Jason Les: That makes sense. And if I could ask one more question, one of the points that we've talked about that we thought has distinguished you guys from other operators is that you're located so close to Dallas and Austin. As you kind of assess or praise your assets, how important is that distance from one of those cities in determining the attractiveness of partnering with a Riot versus someone else? Is there still a premium for location, I guess, is what I'm asking you?

That makes sense and if I could ask one more question.

One of the points that we've talked about we thought is distinguish you guys. Some other operators is that youre located so close to Dallas and Austin as you kind of sets.

Or praise Youre assets.

For the is that distance from one of those cities and.

And determining the attractiveness.

Partnering with.

Right versus someone else is there still a premium for a location.

What I'm asking here.

Philip McPherson: Yeah, Reggie. The location is very important. Dallas is a tier one data center market. It's one of the most in-demand data center markets in the country. That's why I think Corsicana is so valuable. You have the great connections, low latency, and ability to get people and talent to that site relatively easily as a pair, I'm sorry, as opposed to more remote locations. For that reason, I think Rockdale is also an attractive site. Now, Austin, San Antonio, those aren't tier one markets yet. But with the investments that we see in data center CapEx, with the revenue forecast for AI software and the margins that AI software service providers are forecasting and able to get, we think that will change over time.

Yes.

The location is very important Dallas is.

One is it tier one data center market is one of the most in demand data center markets in the country and that's why I think so.

<unk>.

You have the.

Great connections.

Low latency and ability to get people and talent to that relatively easily.

Eric.

I'm, sorry, as opposed to more remote locations.

For that reason you think Rockdale is also an attractive site.

Austin, San Antonio those arent tier one markets, yet, but with the investments that we see in datacenter capex with the revenue forecast for AI software and our margins.

AI software service providers are forecast to be able to get we think that will change over time. So by having these two sites both near one course Academy, our major market today and Rockdale in Europe, what I would say is that in the emerging market I think makes us very attractive and allows them.

Philip McPherson: So by having these two sites, both near one, Corsicana near a major market today, and Rockdale near what I would say is an emerging up-and-coming market, I think it makes those sites very attractive and allows them, because of those elements, allows them to command perhaps better economics than other projects out there.

Because of those elements allows them to command.

Perhaps better economics than other projects out there.

Jason Les: That's what I assume. Glad to hear that. Thank you.

Yes, that's what I, so I'm glad glad to hear that thank you.

Colin Yee: Thank you. Our next question coming from the line of Mike Randall with Northland Capital Markets. Your line is now open.

Thank you.

Our next question coming from the line of Mike Grondahl with Northland Capital markets. Your line is now open.

Operator: Hey, thanks, guys. And congratulations on hiring Jonathan Gibbs. What would you say his top two priorities are this summer and fall?

Hey, Thanks, guys and congratulations on hiring Jonathan Gibbs.

Did you say his top two priorities are this summer and fall.

Philip McPherson: So our number one priority is building this data center platform bar none. And I would break that down into two priorities on accomplishing that. One is building out the team. Jonathan is bringing the critical leadership to making that happen. We've added other individuals that are veterans of data center and client development. We are bringing more talent on as we speak. This is important because we want to build up our expertise. We want to build up our platform so it looks and feels and acts like a way that hyperscale and enterprise and neocloud customers expect. So that's the number one priority. I guess the second priority in parallel, I'm not ranking one over the other, is completing this basis of design at Corsicana.

So our number one priority is building this data center platform BARDA and I'll break that down into two priorities on accomplishing that.

One is building out the team.

And is bringing the critical leadership to making that happen. We've added other individuals that are veterans of data center signing development, we are bringing more talent on as we speak. This is important because we want to build up our expertise we want to build up our platform. So it looks and feels and acts like a way.

Our hyperscale and enterprise and cloud customers expect so that's the number one priority.

I guess.

Second priority in parallel.

The other is completing this basis of design of course this.

Philip McPherson: This will allow us to have more substantive discussions with potential tenants, allow us to advance the design further, work in different customers' conditions. Necessary and really gets the critical parts of negotiations happening. So two priorities. Number one priority, building a data center platform. Two, building the team and building the big design.

This will allow us to have more substantive discussions with potential tenants allow us to advance the design further work in different customers.

A ferry and really guess.

The critical parts of negotiations happening so two priorities number one priority building data center platform.

Two building the team building the big design.

Operator: Got it. Hey, thank you.

Got it.

Colin Yee: Thank you. Our next question coming from the line of Stephen Glaglo with Jones Trading. Your line is now open.

Thank you.

Our next question coming from the line of Steven <unk> with Jones trading your line is now open.

Jason Les: Hi, Jason. Colin and Jason, thanks for the question. How will the new requirements in Texas Senate Bill 6, such as like grid upgrade, cost sharing, mandatory backup generation, disclosure, containment obligations, so forth, affect the cost structure and operations of your mining and your HPC activities at both Corsicana and Rockdale? Thank you.

Hi, Jason calling and Jason Thanks for the question.

How will the new requirements in Texas Senate Bill six.

Such as like grid upgrade cost sharing mandatory backup generation disclosure can payment obligations, so forth affect the cost structure and operations of your mining and your HPT activities above of course, the con in Rockville. Thank you.

Philip McPherson: So first, important to note is that for both of these sites, we have FEAs already in place. So we do not expect to need to renegotiate those FEAs in any way as a result of this change or as a result of this new legislation. This legislation launches a lot of exploratory work and information gathering. That's something that Riot, our very capable public policy team, our power team, and our industry partners are all very involved in. One of the parts of SB6 is looking at the 4CT program. That's something that Riot participates in in order to reduce our transmission charges. That program may see changes as the working groups from this legislation progress. We hope and we're working to ensure this doesn't have too much of an impact on our transmission charges.

So first important to note that for both of these sites we have FDA is already in place.

So we do not expect to need to meet.

Renegotiations with Fda's anyway, as a result.

What has changed.

As a result of this new legislation because legislation launches a lot of exploratory work and information gathering that's something that Ryan.

Very capable public policy team our power team.

And our industry partners are all very often one of the parts of SB six looking at the four CPE program something that Brian participates in her two.

Reduce our transmission charges that program may see changes as well.

The working groups from this legislation.

We don't we hope and we're working to ensure this doesn't have too much of an impact on our transmission charges ultimately theres lots of different ideas of how.

Philip McPherson: Ultimately, there's lots of different ideas of how changes to that program could take place. So it's really too early, I think, to speculate on that. As far as the other requirements go, I think that is probably going to impact new FEAs and new interconnection agreements more than it is us. But it's something we're staying very close to and making sure that we're good stewards of the grid, we're good industry partners, and we're doing what we can to support the grid and give them the data and the reliability that they need.

This is a program to take place so it's really too early to speculate on that.

As far as the other requirement scope.

I think that is probably going to impact new <unk>, a new interconnection agreements more than it is us, but it's something we're staying very close to and making sure that we're good stewards of the grid or good industry partners.

And we're doing what we can support the grit and give them the data and the reliability.

Jason Les: All right. Thank you.

Yeah.

Alright, thank you.

Colin Yee: Thank you. So I'm showing no further questions at this time. I will now turn the call back over to Philip McPherson for any closing remarks.

Thank you.

I'm showing no further questions at this time I will now turn the call back over to Doug Macpherson for any closing remarks.

Philip McPherson: Thank you, operator, and thank you, everyone, for joining us on our second quarter call. We look forward to updating you of further progress on our business on the third quarter call in October.

Thank you operator, and thank you everyone for joining us on our second quarter call. We look forward to updating you further progress on our business on the third protocol is October.

Colin Yee: This concludes today's conference. Thank you for your participation. And you may now disconnect.

Okay.

This concludes today's conference. Thank you for your participation and you may now disconnect.

Okay.

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Okay.

Okay.

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