Hey guys, welcome or welcome back to the channel McNal Money, the official home of Power Analysis. In today's video, Anthony Power and I are pleased to welcome Jason Les back to the program. He's the CEO at Riot Platforms, hot off the heels of their Q4 earnings. Before we get into it, take a second, smash the like button, guys. Big help to myself and the channel. Anthony loves it. If you're not already subscribed, McNoney, feel free to join and let us know in the comments section below if you're currently holding shares of Riot Platforms and what you thought about their earnings call and numbers last night. With that being said, let's get into today's interview.
Okay, away we go. We've got Jason Les back on the program. You guys, a highly anticipated interview, hot off the heels of Riot Platform's Q4 and fiscal year 25 earnings. Jason, it's always a pleasure to have you. Thanks so much for making the time.
Absolutely. Thanks for having me, guys. It's a quarterly occurrence hopping on with you after each of our earnings calls.
Yeah, we look forward to it. And this was an exciting one. I know Anthony and I were on the call. We saw the new slides, the deck, a lot of exciting information. Really tying up a fantastic 2025 and setting the stage for 2026. So with that being said, what were kind of the key highlights in your mind as CEO in Q4 in 2025, both on the operational side of things as you move towards AIHBC and also on the financial side?
Yeah. So I think you could look at it a couple ways. I think the most important thing to highlight is the focus of the transformation that we have going on, transforming from a pure play Bitcoin mining company into a digital infrastructure company, becoming one of the most meaningful data center developers, owner operators out there. That's what I think the big part of the 2025 story is. You know, of course, on the financial side, our revenue increased by 72% from 2024 to 2025. So that's substantial growth that was realized from past Bitcoin mining growth that we've had. But the real part of Riot's story is unlocking the value of our power capacity in the form of developing and leasing data centers to investment grade tenants. So from that perspective, we accomplished a lot over the past 12 months. I'd say for 2025 and then stepping into 2026, we have built together a team with a whole host of veteran data center expertise in order to execute on the strategy. We acquired the additional land that we needed both at Corsicana and Rockdale to be able to fully execute on our data center strategy there. We've completed our basis of design which really forms what we are out there marketing and discussing with tenants. We're not out there, you know, just selling powered land. We're out there selling data center capacity. And I think to round it all off was the announcement that we made at the very beginning of this year with that we had signed our first lease with AMD. Very strong deal with a very strong counterparty and delivering capacity on a very aggressive timeline. And on our earnings call yesterday, we highlighted that we have been successful doing that and how meaningful that is. We delivered our first tranche of capacity to AMD in January and we are on track to deliver our next tranche to AMD in May. That's an incredibly aggressive timeline, but it's a testament to our assets, our balance sheet and the capabilities of our team to deliver. And following on from that, the trust that a technology leader like AMD has in a company like Riot to deliver on and meet their data center needs. So that was the big story for us on the call yesterday.
In terms of margin, you're still able to achieve a mining margin considering the fall in the Bitcoin price. We saw that towards the end of last quarter from its high of 126,000 down to 87,000. And obviously the impact of that drop in valuation is seen across not just your company but literally most of the companies in the space that are using the FSB rules. As we're in a new quarter now, I mean, how do you see the pressures of maintaining a good margin in the mining space for Riot? Because you've been over the last few years, you have delivered in terms of, you know, keeping their margins down there. The benefit of that, the revenues from the power sales and as credits are extremely valuable to the company. We'll obviously continue to do that as we go through 2026. But how do you sort of maintain the current sphere of Bitcoin price, maintain those level of metrics?
Yeah, so as you guys know, Riot has always focused on being a low-cost producer in Bitcoin. That enables us to survive all sorts of period of volatility in the market and we've done that for many years now. We've survived and been through multiple bear markets because of that focus on having cost-efficient operations. Our all-in energy cost for Bitcoin over all of 2025 was just around, just under $40,000 a coin when you account for the power credits we receive from our power strategy. And that's going to be one of the better all-in energy costs per coin in the market out there. So even at a super depressed Bitcoin price, you know, now trading in the high 60,000s, has been volatile the past couple days, we're still able to have a positive margin on a direct basis because of our low-cost power, our low-cost operations. But I think the bigger point here is that our mining operations is really not just a Bitcoin generation business, it is ultimately a power optionality business. When Bitcoin prices are high, so, you know, going back to the start of 2020, start of 2025 and hash price was also very attractive. We're running at full capacity generating strong amounts of revenue. When grid pricing creates curtailment opportunities, we're able to execute in our power strategy and we monetize those megawatts in a different way. When we have data center tenants that want our capacity, we convert that capacity. This is what we've been demonstrating. So the optionality embedded in the 1.7 gigawatts of power that we have in Texas between Corsicana and Rockdale, that optionality is embedded at our cost basis in the asset. Bitcoin mining is just one expression at that asset, not the only one. So the next step from here is taking what we've been able to generate with Bitcoin mining, which is the secured power capacity, and then converting and developing that into data centers that we can lease to some of the highest quality tenants out there. That is the re-rating opportunity for Riot. That's how we maximize shareholder value.
In terms of what you described for 2025 as the strategic evolution for Riot, how should investors sort of like think about Riot today? Primarily as a Bitcoin miner or as a digital infrastructure and power platform where mining is just one of those applications?
I think you can think about Riot as a digital infrastructure company. I think that's a broad generalization that makes sense where we're executing on. We have Bitcoin mining operations in place today and that's generating a substantial amount of our financial results, of course, but the next evolution of the company is as a data center company. So Bitcoin mining is no longer like the end goal. It is a means to the end. It is proven to be an incredibly useful tool for securing power capacity that can be converted. We've done that at Rockdale. We're going to do that at Corsicana. And then in the longer term, we're going to do that Kentucky and other sites that we fold into our pipeline as time progresses. This is the strategy that we're doing, but it's all geared towards maximizing the value of those megawatts long term. Data center leases are financable in a much more attractive way than Bitcoin mining. And the cash flows from data centers are valued at much higher multiples than Bitcoin mining. And if you look at one of the closing slides on our deck, we have a graph there that kind of shows the trajectory of what this strategy can look like as we execute on our current leases and as we develop and, you know, sign future leases and what the ultimate financial opportunity is for Riot. And that is a significant difference from where we are today. And the story that we have is that we have the assets, the people and the balance sheet to be able to execute on that. And that's why Riot is so exciting to us right now.
Hey, that's a perfect segue. And I gotta say, I look at a lot of presentations, Jason. You guys top-notch. Great visuals in there. So, kudos to whoever puts those together. I wanted to double click on the AMD contract, specifically the buildout. What was so surprising to Anthony and I, like you just mentioned, you guys only announced this in 2026. It was one of the later contracts we saw announced in the space. Yet, the delivery timeline was one of the quickest to actually receiving revenues. Now, in this deck, you guys said you're on time, you're on schedule, you're on budget. We also really like the finance side of this deal. The build cost, very competitive to some of your peers. Can you talk to us about first of all how you're even able to make all that work in such a short period of time and then how this positions you for potential expansion with AMD or others who are seeing this progress in front of their eyes?
Yeah, I think this deal is an expression of the concept that we've been talking about about Bitcoin mining helping build up an asset that can then be converted to other use. Now the core strategy that we have here, particularly at Corsicana and then at Rockdale, is developing tier three data centers and leasing those out with AMD. We were approached and had the opportunity to provide a solution for them. They were looking for something slightly different. Wasn't necessarily tier three capacity, but they needed a certain design and they needed it on a quick timeline. We were able to do that because of the assets and the infrastructure that we already have in place. You guys are familiar with Rockdale site, you know, for many years now. I know, especially you, Anthony. And we have our two immersion buildings at the end of that site, buildings F and G. They were in sprung structures. So, not like the steel vented walls like you'd have for air-cooled buildings, but these were fully enclosed sprung structures. And because of their dimensions and the properties and the power infrastructure already there, we were able to convert that capacity very quickly and meet the requirements that AMD had. So I think it's a really successful story to us because the timeline is really impressive and I can't underscore that enough how incredible it is that our team was able to deliver. But it's also that we could generate a solution. You know, people talk about the value of power and they often miss what goes into ultimately creating that end data center product for customers. And it's the fact that we could engineer a specific solution for their requirements and meet that timeline is what makes this such a success story for Riot. So because the requirements are different, you know, not full tier three requirements, the build cost is substantially lower. We're able to leverage infrastructure already that's already there. Of course that's reflected in the rental rate as well. You know, we're not delivering a tier three product that has tier three rental rates. But nonetheless, we generated something that we believe is the foundation of what can be a very long-term infrastructure partnership with AMD. We are delivering. We are meeting our requirements and then we hope that we can foster this relationship and scale it up over time. You know, you've seen the agreement has mechanisms in it to provide additional capacity to AMD over time and we are very hopeful that this is the beginning of something very long-lasting and meaningful with AMD.
Now obviously you showed the slide about the potential growth in that contract with AMD. Can you talk about the sort of the workforce that have been there to support that, them changes to buildings F and G for this first 25 megawatt? And obviously through the sort of like conversations you're having with AMD, you know, you've got this potential 100 megawatts expansion too and then potentially even double that as a first refusal to AMD as well. What are those conversations like post that? Because obviously you got a workforce in place there. Are they a workforce that can be switched on and off or are they there for the sort of like the long haul in terms of what you're trying to deliver at both sites? And bear in mind Corsicana and Rockdale are not a million miles away from each other in terms of sites themselves.
Right. So I think there's a combination of resources that came in to make this possible. First I'd say the data center talent that we brought into our team that understands how to design, engineer, and deliver for these types of customers was obviously critical to being able to execute here. They were able to work with our existing team on the ground to take care of some of the jobs necessary to ready and then convert this capacity. We've also leveraged fantastic general contractor relationships to execute on different parts of development as well. And I think what is great about working with Riot is the visibility into the pipeline of more and more jobs. We, when we delivering just 25 megawatts with AMD, first off, you can see that the contract has a mechanism in it for that capacity to grow. You can see the site has all sorts of optionality embedded in it. And then you know, you can see over at Corsicana we're building out a full 1 gigawatt tier 3 campus as well. So, it puts us in a great position to build meaningful long-term partnerships with general contractors who have their own business objectives that they're looking to accomplish and value working with the predictability of someone that is ultimately not just building out 25 megawatts, but building out 1.7 gigawatts of utility load between Corsicana and Rockdale.
I've got a follow-up there and to be honest with you, as this obviously lease with AMD is now operational and I'm not asking here, we don't want to you line name any potential future partners, but did this deal with AMD, has this now started to validate Riot? And how's it changed the conversations that you're having with potential future clients or AI customers?
It was an absolute game changer and I can't underscore that enough. Riot transitioned from being a Bitcoin miner that is out there trying to do something to a Bitcoin miner that is signed a deal with one of the most meaningful technology companies out there. You know, I don't know about you guys as just an individual, AMD has been a big part of my entire life. You know, using their products has been around for many decades. So they are a staple in the technology industry and now they are positioning themselves to be a big winner in the AI explosion that's going on as well. The fact that we are able to sign a deal with AMD and then deliver on that deal in a timely manner on time has really positioned us so well in the marketing and the commercial discussions that we're able to have now. And the timing also worked perfect because it matches up with the roadmap that we've laid out. Go back to our August Q2 earnings call and our August earnings call for the second quarter of 25. We said, "Hey, what we're going to be doing here is developing our basis of design and then we're going to be talking to the engineering teams at different hyperscalers and customer segments to validate that we have a design and start the conversation with them." On our Q3 earnings call at the end of October, we said, "Okay, we've completed our basis of design. This is what it is. We have now started our technical outreach and next will be the commercial level of that." We since then engaged in the technical outreach. We're able to enhance our design from some of the feedback that we got to make sure we were meeting the latest requirements that these customers have and now we're in the commercial stage and that's happening at the same time that we're signing the deal with AMD and have been delivering for AMD. So I think we're in a great position. There is a tremendous amount of interest. There's a lot of work to do. You know, the timing around signing deals is unpredictable. So, I'd always leave that caution out there. I think some of our peers have talked about signing deals and all the stop and go they had up until the final point the deal was signed. But there's an incredible amount of interest and I think we are in a great spot to execute on additional leasing over the rest of 2026.
Just one, can I have one more final final on the deal there. I mean we know from a mining perspective Rockdale and Corsicana part of the 4CP program also scaling as good citizens to make sure domestic supply is not unhindered. How does this affect, you know, a deal now with AMD? What's the sort of like, you know, the requirement there? I mean when we hear HPCI that immediately people think 59s, you've got to have that sort of uptime consistently. How does that work at Rockdale? We know you've got a PPA agreement there for 345 megawatts. What does that mean for you guys delivering that contract?
Yeah, so no obligation to participate in those different types of demand response curtailment programs. We do that with our Bitcoin mining load because it is curtailable and that is an opportunity we're able to take action on. For data centers, it's obviously very different. They're looking for these high levels of uptime like you're talking about. So we are not required to participate in 4CP. That is something we do that helps save on cost. We're not required to participate in the other programs. It's ultimately up to a tenant how they want to manage their own load. The power costs are passed through and they are managing their own power strategy. I can't tell you what they would do. I'd be surprised if data centers were participating in 4CP and that sort of thing, but I think our main objective is to deliver the highest quality infrastructure and operations possible for them.
Good point. Now with so much excitement going on at both of these sites, we'll talk about the core and shell development at Corsicana in a second here. Which of the two sites would you say are you receiving more calls, more demand about, Jason? And is there any significant differences, thinking maybe aside from actual megawatts between the two sites?
Yeah. I think it's clear that Texas continues to be one of the most sought-after markets. Both Corsicana and Rockdale are in that Texas triangle. Corsicana outside of Dallas, just an hour away, which is a tier one market. Rockdale closer to Austin in the San Antonio market. Not a tier one market, but certainly up and coming. So they're in different places but they both present large amount of capacity that can be delivered very quickly near a major metropolitan. So there's been strong interest in both of them. I wouldn't necessarily pick one over the other. I think the only difference is that Corsicana it's more of a building an entire campus from the start there and then at Rockdale we've had these opportunities with AMD to repurpose infrastructure and then we have additional land there so we'll be able to do other developments in the future when we're ready to talk about those. So strong interest from both. We're very very pleased with the level of interest that we're getting.
We were very privileged to be invited in November to do a tour of the Corsicana site and obviously we're very impressed the fact that you were already sort of significantly way through achieving the extra 400 megawatt substation there and to go and actually, you know, actually visit the site that, well, one of the two sites that you've recently purchased to help drive this new strategy. Can you tell us about the stage now where we're up to with regards to the substation? Has that been completed? And have any sort of works been carried out on that new piece of land adjacent to the Corsicana site?
Yeah. So for background the current site at Corsicana has a 400 megawatt substation taking down starting at 345 kV and we have already secured the equipment to build that out to a 1 gigawatt substation. So the next 400 megawatts we have already received that transformer equipment that is on site and that is going to be deployed. The next tranche of transformer equipment to take it to 1 gigawatt that is on track to be delivered this year. So in 12 months we have the pieces together where this is going from 400 megawatts today to that 1 gigawatt of capacity. And that's a reason this site is so compelling. It's not an empty piece of land that is hoping to get grid approval or even if it was an empty piece of land that already had grid approval but then was trying to wait up for substation equipment. We've already waited in that line. We entered into these orders years ago and there's no replacing for that. That's the advantage that we have now. So that substation is going to 1 gigawatt on a very quick basis. Anthony, you highlighted we purchased the land across the street and another parcel nearby. That land across the street allows us to now fully execute on building out all of that capacity. And we are imminently going to be doing work across that, across the way on that new parcel to get it ready.
That's great. Now another slide highlight that I saw was ESS Metron and the engineering side of the business specifically the revenue backlog. It looks like a large portion of that is going towards data center construction and buildouts. This is another really unique competitive advantage of Riot. A lot of people really unaware of this component of the company. Can you talk to us about why it's so important and then the growth you're seeing in that division?
Yeah, it's been incredibly valuable. In fact, the fact that we own ESS Metron and have this internal engineering and manufacturing capability is one of the reasons that I should have highlighted earlier is another one of the reasons we were able to deliver for AMD so quickly. So it's not just having the power and the infrastructure to have this capability to engineer the exact solution we needed very quickly. We could only do that because we owned ESS Metron. That's an advantage you're going to continue to see in action as we scale up our data center development efforts. We purchased ESS Metron in December of 2021 for total consideration of, or I'm sorry, I think November 2021, November December 21 total consideration of around $52 million. Since then we have saved over $20 million on capex from buying the equipment from ourselves and that was just for Bitcoin mining developments. You know, largely at Corsicana. You can imagine what the savings look like when you're talking about building a 1 gigawatt, 1.7 gigawatts of gross utility load power capacity. So the real savings from a financial perspective we're only starting to scratch the surface on. The bigger reason that we acquired ESS Metron was strategic to give us visibility and control over our supply chain for equipment that we saw was going to be in very short supply but very high demand. Not only has that been the case for Riot, but we've seen that in how the customer composition of ESS Metron has changed since we acquired it. When we first acquired ESS Metron, they were doing oil and gas projects. They were doing some generation projects. They were doing government contracts and some data center projects. Now, as you note on that slide, Bryce, 90% of the backlog is data center projects. ESS Metron, the demand for their product has never been higher. And we are able to leverage this internal capability to ensure that we can first engineer the exact types of equipment that our customer needs and then also ensure that we can get it on the timeline that they need as well. That has been very additive in commercial discussions that we've had and it's also been additive quite frankly in recruiting discussions. A lot of engineering talent has really appreciated the fact that Riot has this capability with ESS Metron and loves the opportunity to work with them to engineer custom solutions on a timely basis. So it's twofold here, Bryce. One, that business is growing very rapidly which is fantastic and then two, significantly de-risking our procurement process for this equipment and giving us a strategic advantage as we execute on the data center strategy.
