Riot Platforms, Inc. Third Quarter 2026 Earnings Conference Call - RIOT PLATFORMS INC

Explicit Guidance:

• Revenue: Lease revenue projected to ramp from ~$23M (2026) to ~$250M (2027), ~$1.8B (2028), and ~$2.3B (2029, full service).
• Net Operating Income (NOI): Full deployment of executed contracts expected to generate average annual NOI of ~$2.2B (exceeding prior guidance range of $1.6B–$2.1B).
• Capital Expenditure (CapEx): Total project capital estimated at ~$7.6B–$7.8B ($5.5B Corsicana, $2.1B–$2.3B Rockdale); Corsicana costs at $6M/IT MW vs. ~$11M–$12M/IT MW for Rockdale Tier 3 builds.
• Debt Financing: Expecting non-recourse project debt to size at 80%–90% of Lender Cost (LC), requiring Riot cash equity of ~$800M–$1.5B across projects; financing launch planned for 2027 ahead of phase deliveries.
• Yield: Unlevered yield on cost for Corsicana estimated at ~33%; portfolio unlevered yield on cost at full deployment ~28%.
• Bitcoin Treasury: No specific future guidance on holdings, but management expects to continue selling "substantially all" mined Bitcoin to fund development.
• Equity: No equity raised in 2026; no equity issuance anticipated for any announced projects (AMD, Rockdale, Corsicana) as of the call.

Business-Segment Outlook:

• Data Center (Leased Assets):
  • Corsicana: 910 MW triple-net powered land lease signed with a leading Frontier AI Lab; full campus delivered by July 2028. Phases: 400 MW (Sept 2027), 200 MW (Jan 2028), 310 MW (July 2028).
  • Rockdale (Frontier AI Lab): 191 MW deployment on schedule; Phase 1 (96 MW) ready Dec 2027, Phase 2 (95 MW) ready June 2028.
  • AMD: 50 MW total capacity (25 MW already online, 25 MW expansion) expected online May 2027; additional expansion options for 150 MW exist.
  • Total Pipeline: 1,151 MW contracted (38B contract revenue, $72B with extension options); potential to reach 1.3 GW with AMD options.
• Bitcoin Mining: Hash rate at 44.9 EH/s (4.9% global share); net cost of power ~$0.032/kWh. Mining operations at Corsicana expected to begin ramping down in summer 2027 as data center phases proceed.
• Engineering: Backlog at $142M (>90% data center work); margins expected to improve in Q4 2026.

Market and Competitive Outlook:

• Demand: Strong interest from single-tenant "Frontier AI Labs" seeking rapid time-to-compute; full-site takedown preferred to maximize value and reduce operating complexity.
• Pricing & Structure: Corsicana structure (triple-net, tenant-operated compute) achieves NOI margins ~99% vs. 80%–90% for Tier 3 builds where Riot bears O&M.
• Capacity Efficiency: Corsicana's 1 GW utility load supports 910 MW IT capacity (20% increase over original 756 MW Tier 3 design).
• Competition: Confident in leasing remaining Rockdale capacity (200–250 MW) via existing tenants or new partners, driven by constrained grid-approved power.

Macro / Industry Outlook:

• Credit Environment: Acknowledges tighter credit market with higher rates and spread widening; execution focused on matching credit basis to project (e.g., Investment-Grade tenant support for Rockdale/Corsicana debt).
• Regulatory/Political: Management expresses high confidence that existing site approvals and power interconnections (Rockdale/Corsicana) remain secure regardless of election outcomes, citing years of operational history and community relationships.
• FX/Tariffs: Management notes active management of "tariff and material escalations" through contracts with escalation tables and early procurement of long-lead items.

Strategic Initiatives:

• Corsicana Lease Structure: Shift to "powered land lease" (Riot provides land/power; tenant procures/install/owns compute); reduces Riot CapEx intensity by ~50% vs. Tier 3 builds.
• Financing Strategy: Three non-dilutive funding layers for Corsicana: 1) Non-recourse project debt; 2) Tenant rent credits (Path B if debt unavailable); 3) Riot liquidity.
• Capital Allocation Philosophy: Capital deployed only if risk-adjusted return > cost of capital and share buyback is not more accretive; priority on returning capital when growth is funded.
• Future Growth Pipeline: Pursuing capacity via 1) Site expansions; 2) Acquiring grid-powered land; 3) Self-generation; 4) M&A; 5) Joint Ventures.
• Rockdale GMP: Targeting ~70% of budget under Guaranteed Maximum Price (GMP) contracts by year-end; remaining costs managed via early procurement and contingency reserves.

Risks and Headwinds to Outlook:

• Cost Overruns: Residual risks at Rockdale (non-GMP scope, site conditions, OFCI equipment, labor) and Corsicana (site work scope); mitigated by GMP contracts and early procurement.
• Financing Availability: Risk that project debt is unavailable on comparable terms; mitigated by "Path B" mechanism where tenant funds reimbursements via rent credits (implied 12% interest).
• Execution: Delivering 1,151 MW across three distinct projects within a 20-month window; reliance on "in-house engineering" and "preferred vendors" to mitigate schedule risk.
• Market Dynamics: Potential for tighter labor markets or material escalation despite contractual protections.

Management Tone on the Future:

• Confidence: High; describes Corsicana as a "fundamental change" in business profile, shifting from Bitcoin price exposure to long-term, high-margin AI infrastructure cash flows.
• Strategic Clarity: Emphasizes "execution" over "signing," noting the timeline from lease signing to cash flow is compressed (2026 to 2028).
• Valuation: Explicitly states the company will be valued on contracted cash flows and defined capital budgets rather than mining metrics; rejects dilution for funded projects.

Miscellaneous:

• Liquidity: $950M total liquidity ($748M cash + $202M BTC) at quarter-end; fully repaid $200M Coinbase credit facility.
• Asset Disposition: Sold 20,264 BTC YTD for $1.5B; reduced holdings to ~2,400 BTC.
• Share Count: No dilution anticipated for announced projects; "equity only where investment is meaningfully accretive on a per year basis."