Riot Platforms, Inc. (RIOT) | The Buildout — AI Infrastructure
The Verdict
Riot Platforms owns large power sites in Texas and Kentucky and converts them into data centers. It began as a bitcoin miner, and the same energized land, substations and interconnection rights are what AI tenants need. The company leases critical IT capacity by the megawatt under long-term contracts, builds shells to the tenant's specifications, and manufactures some of its own electrical gear through its Engineering segment. Its core claim is that it already holds the power — energized capacity at Rockdale and Corsicana that sits outside the ERCOT queue.
| Market Cap | — |
| Revenue (TTM) | $674M |
| Revenue Growth | +24.5% |
| EBITDA Margin (TTM) | -32.6% |
| Net Cash | $192M |
| Earnings Beats | 3 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Contracted data center revenue went from zero to about $9.8 billion in roughly seven months, across 241 MW of executed capacity with AMD and one frontier AI lab.
- The two executed Rockdale leases average about $520 million of annual revenue and $416 million to $462 million of annual NOI at full deployment, at an 80%-90% NOI margin.
- Engineering revenue more than tripled year-over-year to $37.3 million, with gross margin expanding from about 7% to over 27% and $177.1 million of backlog that is roughly 90% data-center driven.
- The $573 million Morgan Stanley facility is fully secured by the tenant, and management expects the roughly $180 million AMD term loan to close before the end of the third quarter of 2026.
- Riot holds more than 2 GW of utility power, with Rockdale and Corsicana outside the ERCOT batch process, and no common equity was issued in Q1 or Q2 2026.
What We’re Watching
- Corsicana is a nonbinding LOI, not a lease. Management said the process "can still take a number of twists and turns" and pointed to an update "in the coming months."
- The investment-grade backstop and the takeout of the Morgan Stanley interim facility are not closed; management declined to name parties or terms.
- Delivery dates to watch: 10 MW in November 2026, the full AMD 50 MW in May 2027, and the AI lab's first 96 MW with rent commencing in December 2027.
- Bitcoin is the declared funding source for the equity component of data center capex; holdings fell to 11,380 BTC from 15,679 and the direct cost to mine rose to $49,912 per BTC from $44,629.
On the evidence, the thesis is strengthening on contracting and unproven on financing and delivery. Riot has signed roughly $9.8 billion of contracted data center revenue and delivered AMD's first tranche on time and on budget, which moves the story from narrative to signed paper. What has not moved is the funding: the investment-grade backstop is unclosed, the largest counterparty is unnamed, and the Corsicana LOI remains nonbinding. The key open question is whether the takeout closes at investment-grade economics before the combined capex peak in Q2-Q3 2027.
Earnings
Riot reported Q2 2026 revenue of $174.2 million, up about 14% year-over-year, with a 23.7% gross margin. GAAP net loss was $237.2 million, or $0.68 per diluted share, and free cash flow was negative $150.9 million. The standout was inside the Data Center segment: recurring operating lease revenue rose to $4.9 million from $0.9 million in Q1, at an 84% operating lease gross margin.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $174M | $167M | $153M | +13.9% |
| Gross margin | 23.7% | -39.6% | -13.9% | +3760bps |
| EBITDA | −$142M | −$45M | −$14M | +911.4% |
| EPS | $-0.68 | $-1.44 | $0.57 | −218.9% |
| Data Center operating lease revenue | $4.9M | $0.9M | n/a | — |
| Engineering backlog | $177.1M | $193.4M | n/a | — |
In aggregate, these noncash items exceeded the entire net loss for the quarter and do not reflect the underlying economics of our operations.— Chung, CFO, 2026-08-10
Management tone: Between the two calls on file, management moved from inflection language to execution language. On the Q1 2026 call the CFO presented "the inaugural financial results of our Data Center segment," and management described the quarter as a "definitive inflection point" in the transition into a significant data center operator. On the Q2 2026 call the framing was "If 2025 was the year of preparation, 2026 is the year of execution," with named financing facilities and dated delivery schedules. The CFO repeatedly used the word "underlying" to steer the read from GAAP losses toward lease NOI. In Q&A, management was specific about the AI lab capex range and AMD's option mechanics, and declined to name the Corsicana counterparty, the backstop provider, or the AMD option expiration date.
Management Guidance
On the Q2 2026 call management gave a capex cadence — ramping through the back half of 2026, peaking in the first half of 2027, and continuing into early 2028, with combined AMD and AI lab peak capex between Q2 and Q3 2027. It said it expects to close the roughly $180 million AMD term loan before the end of the third quarter of 2026 and that the investment-grade backstop takeout would come "in the coming months." Delivery dates were restated: 10 MW in November 2026, 15 MW in May 2027, the AI lab's first 96 MW in December 2027, and the full 191 MW in June 2028. The Q1 2026 targets of a $37.8 million annualized operating lease run-rate exiting 2026 and $55.6 million exiting 2027 were not restated verbatim.
Trajectory
Revenue has moved sideways for five quarters — $153M, $180M, $153M, $167M, then $174M — while year-over-year growth decelerated from +112.5% in Q3 FY2025 to about +14% in Q2 FY2026. The mix underneath is changing. Bitcoin Mining remains the largest segment by revenue at $113.7M in Q2 2026, but its direct cost to mine rose to $49,912 per Bitcoin from $44,629 in Q1 and net power cost rose to $0.036/kWh from $0.03. Data Center operating lease revenue climbed to $4.9M from $0.9M at an 84% operating lease gross margin, and segment gross profit rose 174% quarter-over-quarter even as segment revenue fell to $23.2M from $33.2M. Engineering revenue more than tripled year-over-year to $37.3M, with gross margin expanding from about 7% to over 27%.
The Model
The model projects FY+1 revenue of $716.0 million with EBITDA of negative $113 million, a -15.8% margin, and FY+2 revenue of $1,097.7 million with EBITDA of negative $105 million, a -9.6% margin. The near-term anchor is the contracted ramp: AMD's 50 MW deploying through May 2027 and the first 96 MW of the frontier AI lab lease with rent commencing in December 2027. FY+2 reflects that lease reaching its full 191 MW by June 2028. The five model runs disagree widely in the second year — the FY+2 revenue spread is 48%.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $647M | $716M | $1.1B |
| YoY Growth | — | +10.6% | +53.3% |
| EBITDA | −$53M | −$113M | −$105M |
| EBITDA Margin | -8.2% | -15.8% | -9.6% |
Projections are the median of 5 independent model runs.
On the Q2 2026 call management gave a capex cadence — ramping through the back half of 2026, peaking in the first half of 2027, and continuing into early 2028, with combined AMD and AI lab peak capex between Q2 and Q3 2027. It said it expects to close the roughly $180 million AMD term loan before the end of the third quarter of 2026 and that the investment-grade backstop takeout would come "in the coming months." Delivery dates were restated: 10 MW in November 2026, 15 MW in May 2027, the AI lab's first 96 MW in December 2027, and the full 191 MW in June 2028. The Q1 2026 targets of a $37.8 million annualized operating lease run-rate exiting 2026 and $55.6 million exiting 2027 were not restated verbatim.
What Could Go Right — and Wrong
- The Corsicana LOI converts into a signed lease for the full 756 MW of potential critical IT capacity, against management's ">$1 billion in annual rent upon full deployment" marker.
- AMD exercises the remaining 50 MW option and then the conditional 100 MW, opening a pathway to 200 MW at Rockdale.
- The investment-grade backstop closes, taking out the $573 million Morgan Stanley interim facility and setting the cost of project debt.
- The unnamed frontier AI lab is identified, making roughly $9.1 billion of contracted revenue assessable on credit.
- Bitcoin holdings stop shrinking, or mining unit costs stabilize, easing the equity funding constraint as capex peaks.
- The Corsicana LOI lapses, leaving 756 MW of potential critical IT capacity uncontracted and the development spend against it to be carried.
- The backstop takeout does not close at investment-grade economics before the combined capex peak in Q2-Q3 2027.
- Delivery slips past December 2027, pushing AI-lab rent commencement — the switch that converts contracted revenue into cash.
- Bitcoin keeps falling in value or mining unit costs keep rising while mining remains the funding source for the equity component of capex.
- The largest counterparty stays unnamed while carrying roughly 93% of the $9.8 billion contracted data center revenue.
Looking Ahead
Over the next twelve months the work is financing and construction, not leasing. Management expects to close the roughly $180 million AMD term loan before the end of the third quarter of 2026 and to complete the investment-grade backstop takeout "in the coming months," and has pointed to a Corsicana lease update "in the coming months when there's more to share." On the build side, 10 MW of AMD capacity is due in November 2026, and capex ramps through the back half of 2026 toward a peak in the first half of 2027.
- Before end of Q3 2026AMD term loan close — ~$180M term loan against ~$90M of initial capex.
- Coming monthsBackstop takeout — Investment-grade backstop to take out the $573M Morgan Stanley facility.
- Coming monthsCorsicana lease conversion — Nonbinding full-site LOI; >$1B annual rent at full deployment.
- November 2026AMD Phase 3, 10 MW — First delivery of AMD's 25 MW expansion.
- May 2027AMD full 50 MW — Remaining 15 MW completes the AMD lease.
- December 2027AI lab rent starts — First 96 MW delivered; rent commences on the 20-year term.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $377M | $647M | $674M | +71.9% |
| Gross Margin | 28.9% | -16.1% | -13.8% | 4,502bps |
| EBITDA | $366M | −$53M | −$220M | -114.6% |
| EBITDA Margin | 97.1% | -8.2% | -32.6% | 10,531bps |
| Net Income | $109M | −$663M | −$1.3B | -706.1% |
| Free Cash Flow | −$1.5B | −$880M | −$883M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)-13.8%
- EBITDA Margin (TTM)-32.6%
- Net Margin (TTM)-196.3%
- ROIC-23.7%
- SBC / Revenue20.9%
The Company
Riot Platforms describes itself in its FY2025 10-K as "a vertically integrated digital infrastructure company principally engaged in developing and optimizing our large-scale power assets." The asset is the energized power, not the building. Riot holds more than 2 gigawatts of utility power, including 1.7 gigawatts of fully approved energized capacity at Rockdale and Corsicana, and leases critical IT capacity in megawatts under long-term contracts. That is the AI linkage: it does not sell compute, GPUs or models — it sells the physical prerequisites.
Operationally the company runs three segments. Bitcoin Mining produces bitcoin and funds the business; Data Center leases capacity by the megawatt and performs tenant fit-out work; and Engineering, through ESS Metron and E4A Solutions, manufactures low- and medium-voltage switchgear and power distribution units, which the CFO calls "among the most severely constrained long lead components in the data center supply chain." The plants are Rockdale at 700 MW of developed capacity, Corsicana at 400 MW developed and expected to reach about 1 GW, and Kentucky at 162 MW at 2026-03-31, targeting about 232 MW through the remainder of 2026. Engineering also sells to outside customers, and in Q1 2026 printed $17.7 million of intersegment revenue that is eliminated on consolidation.
Business Segments
Competitive Landscape
The evidence frames competition as a race for in-place power rather than for tenants. Riot is one of several bitcoin miners converting power sites toward AI and HPC — APLD, CLSK, HIVE, IREN, KEEL and CORZ appear alongside it in the same cross-stack themes — and Applied Digital names Riot directly in its own filing. Riot's differentiating claim in its own materials is that its Rockdale and Corsicana sites are already energized and sit outside the ERCOT batch process.
- Applied Digital (APLD)Names Riot in its own filing: "we compete against Bitdeer Technologies Group and Riot Platforms." Riot does not discuss it in the material.
- Bitdeer (BTDR)Named alongside Riot in Applied Digital's filing; not discussed by Riot.
- CleanSpark (CLSK)Named in filings; not discussed.
- IRENNamed in filings; not discussed.
- Bitmain Technologies LimitedRecorded as a competitor and also a deployed miner brand: Riot "currently deploy[s] Bitmain.. Antminer, and MicroBT WhatsMiner type miners."
Supply Chain
Riot buys miners, power and electrical components, and sells megawatt-scale data center capacity and its own switchgear. No neighbor in the read-through names Riot except IMSR of Terrestrial Energy.
More on RIOT: Earnings recap