Q4 2025 Earnings Call Transcript

Good day, and thank you for standing by. Welcome to Riot Platforms Fiscal Year 2025 Earnings Conference Call. [Operator Instructions] Please also be advised that today's call is being recorded. I would now like to hand the conference over to Joshua Kane, Head of Investor Relations at Riot Platforms. Please go ahead.

Thank you, operator. Good afternoon, and welcome to Riot Platforms Fiscal Year 2025 Earnings Conference Call. My name is Josh Kane, Head of Investor Relations. And joining me on today's call from Riot are Jason Les, Chief Executive Officer; and Jason Chung, Chief Financial Officer.

On the Riot Investor Relations website, you can find our fiscal year 2025 earnings press release and 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 fiscal year 2025 performance. Forward-looking statements may include, but are not limited to, statements that predict future events or trends, forecast for performance and may contain words such as believe, expect, intend, project, plan, words or phrases with similar meaning.

Actual results could materially different due to factors discussed in today's earnings press release and comments and responses made during today's call and in the Risk Factors section of our Form 10-K for the year ended December 31, 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, Josh. 2025 was a transformational year for Riot Platforms. It was the year we fundamentally repositioned this company to be at the forefront of the data center industry. Today, I am exceptionally proud to share the significant milestones we have achieved and outline the path forward as we continue executing on our strategy to maximize the value of our power portfolio for shareholders. Riot has evolved from a Bitcoin Mining company with data center potential into a proven data center developer with a track record of rapid execution.

I'd like to take a minute now to walk through some of the key achievements that made 2025 truly transformational for Riot. We completed the fee simple acquisition of our Rockdale site, securing 200 acres of critical land now under our full ownership. We also completed our basis of design platform that positions us to deliver data center capacity at the scale and speed the market demands. We built substantial internal expertise by recruiting veteran data center talent across every critical function.

Our team now includes leadership across product development, construction, engineering, sales and marketing with collective experience completing over 200 data center projects totaling nearly 4.8 gigawatts of design and construction experience. This depth of experience is critical. It's what enabled us to give prospective tenants confidence in our ability to deliver mission-critical infrastructure on aggressive time lines. Data center development talent is in high demand, and we are incredibly proud of the depth of capabilities and experience that we have been able to attract to Riot.

The quality of our data center team is a critical advantage in ensuring that potential tenants and partners are confident in our ability to deliver at scale. We have also significantly expanded our land portfolio to support full utilization of our approved power capacity. We acquired 3 additional parcels adjacent to and near our original Corsicana site, bringing our total land footprint at Corsicana to approximately 900 acres. This acquisition simplifies and expedites the planned development of our full 1 gigawatt of approved power capacity at Corsicana, all on Riot-owned land in a connected campus layout.

In the fourth quarter of 2025, we closed on the previously leased 200-acre Rockdale site for a total consideration of $96 million, funded entirely through the sale of approximately 1,080 Bitcoin from our balance sheet. This purchase was a strategic imperative, converting our interest from a ground lease to full ownership unlocked our ability to develop data centers at Rockdale and eliminated approximately $130 million in future rental payments that would have been due over the remaining lease term and extension options. And finally, we completed our standard basis of design, which was a critical step in engaging potential tenants on both technical and commercial discussions.

Together, these achievements have positioned Riot for substantial data center development in 2026 and beyond. On the leasing front, we announced our first lease with AMD in January of 2026, demonstrating Riot's capabilities as a credible developer and operator. When a company of AMD's caliber chooses Riot for mission-critical infrastructure, it sends a clear signal to the market about the strength of our capabilities and our team. Our focus for 2026 is clear: one, the delivery of the full 25 megawatts of compute for our AMD lease; two, executing on additional leases at both Corsicana and Rockdale, beginning with the development of our first core and shell at Corsicana; and three, secure attractive low-cost financing that reflects the quality of our tenants and sites.

We now have active discussions ongoing with multiple high-quality tenants who have expressed strong interest at both our Corsicana and Rockdale sites. The absolute certainty to large-scale power our sites offer is incredibly rare in today's market and has led to numerous interested parties actively engaging. Our sales strategy accommodates leasing outcomes that result in either single tenant or multitenant campuses at both locations, maximizing our flexibility. On the development front, our execution is already speaking for itself.

We delivered the initial phase of power capacity to AMD on time and on budget, and we are already generating revenue. In an industry where delays are common, delivering on time to a world-class tenant is a powerful validation of our execution capabilities. Core and shell development is underway and progressing at Corsicana. Our Corsicana substation expansion remains on schedule with total power capacity reaching 1 gigawatt over the next 12 months.

On capital management, Riot is maintaining a disciplined front framework to efficiently fund our data center business. We are activating our strong balance sheet to fund upfront development costs without relying on dilutive equity financing. We will efficiently access project finance and debt capital markets to deliver on high credit quality leases. Upon stabilization of our assets, we plan to refinance with permanent debt to recycle capital into higher return projects, creating a compounding flywheel of development.

Initial work is underway to assess financing options for the AMD lease, including additional capacity for future potential expansions in anticipation of AMD exercising their options. Moving to Slide 8. I want to underscore the philosophy driving our leasing strategy. We are not simply looking to fill capacity. We are focused on strong high creditworthy tenants to match our high-quality assets.

The reason for this focus comes down to capital efficiency and asset valuation. In the digital infrastructure space, cost of capital is highly correlated to the credit quality of the tenant, often pricing off the back of their underlying credit rating. By partnering with highly creditworthy counterparties, we secure the most favorable, lowest-cost financing available in the market. This minimizes our equity investment requirements and maximizes our return on invested capital.

From a capital markets perspective, this also drives premium valuation multiples, leading to significant value creation for our shareholders. The AMD lease serves as a validation of our strategy. AMD is a global leader in the AI ecosystem with an S&P credit rating of A and to have a tenant of AMD's caliber entrust Riot to deliver mission-critical infrastructure sends a definitive message to the broader market. This message is that our team, our sites, and our execution strategy are operating at the highest possible level and this paves the way for ongoing discussions with other high-quality partners.

Now I'd like to pause and highlight the importance of the achievement that Riot has made. We have successfully commenced Phase 1 of the AMD lease on schedule in January and remain on track to deliver Phase 2 as planned in May. This execution validates the capabilities of our data center team and demonstrates our ability to meet the demanding time lines of premier technology tenants. The speed of our execution was remarkable.

We announced the lease in January and delivered the first phase of capacity within the same month, which is something that traditional greenfield developers simply cannot match. We are delivering capacity in 2 phases to derisk execution. The first 5-megawatt phase was delivered and commenced rent in January of 2026. The remaining 20 megawatts will follow in May 2026, bringing the total initial deployment to 25 megawatts of critical IT load. The capital required for this initial deployment is approximately $90 million, which translates to roughly $3.6 million for critical IT megawatts, significantly below what traditional new build projects typically require.

The expansion potential is significant. AMD holds an option to expand by an additional 75 megawatts of critical IT load, which can be accommodated within the remainder of Building G and Building F using the same capital-efficient retrofit model. Beyond that, AMD holds a right of first refusal on an additional 100 megawatts of capacity. If AMD were to fully exercise both the expansion option and the ROFR their total footprint at Rockdale would reach 200 megawatts of critical IT load.

This slide reviews the key terms of our previously announced deal. With this lease, we have entered into a 10-year agreement to provide customized data center space at our now fully owned Rockdale site. The lease includes 3 5-year extension options, creating the potential for a 25-year partnership. From a financial perspective, the total contract value for this initial 25-megawatt deployment over the 10-year base term is $311 million.

We expect this to generate average annual net operating income of approximately $25 million, representing highly visible contracted cash flows with an investment-grade counterparty. Our Power First strategy underpins everything we do at Riot. The majority of Riot's operating power capacity is currently monetized through Bitcoin Mining, which generates strong cash flows to support our operations and development activities. Going forward, we will continue to convert power capacity and pursue data center leases that maximize value for our shareholders.

The AMD lease demonstrates this strategy in action. We leveraged existing infrastructure to deliver at speed and at scale, translating into highly profitable and predictable long-term contracted cash flows with an investment-grade counterparty. The economic comparison is compelling. The AMD lease generates 2.5x more gross profit per megawatt than Bitcoin Mining.

This economic framework will guide our capital allocation decisions going forward, where we can generate higher risk-adjusted returns through data center leasing with creditworthy counterparties. We will prioritize data center development, where Bitcoin Mining remains the highest and best use of our power, we will continue mining while remaining flexible to convert that capacity to data center use. Slide 14 highlights the significant scale and quality of Riot's power portfolio in Texas. Riot has 1.7 gigawatts of fully approved firm power across our Corsicana and Rockdale sites.

This is not a prospective pipeline or speculative capacity, but rather power that is in use and available for development and utilization today. At Rockdale, we have 700 megawatts of total approved capacity. This power was originally approved in the fourth quarter of 2019 and energized in the second quarter of 2020. In fiscal year 2025, we had an average load of 351 megawatts at Rockdale. The site features a direct non-interruptible evergreen connection to the grid with no intermediaries between Riot and the utility, supported by a 700-megawatt substation already on site and operating.

At Corsicana, we have 1,000 megawatts or 1 gigawatt of total approved capacity. This power was approved in the fourth quarter of 2022 and energized in the second quarter of 2024. In fiscal year 2025, we had an average load of 335 megawatts at Corsicana. The substation expansion remains on schedule to deliver our full 1 gigawatt of capacity over the next 12 months. Both Rockdale and Corsicana are fully approved sites with firm power located in some of the most attractive data center markets in the country.

This distinction gives us a major competitive advantage in today's power constrained environment. Current time lines to procure new power within the Texas triangle are estimated at 4 or more years. So having large-scale energized power today in the right locations is extraordinarily valuable. This scale of energized power is an extremely high demand asset and forms the foundation of our financial profile.

I will now turn the call over to Jason Chung to present our fiscal year 2025 financial update.

Thank you, Jason. For fiscal year 2025, I am excited to present Riot's financial results, which demonstrate both the strength of our operating model and the significant progress we have made in positioning the company for long-term value creation. For the full year, Riot reported total revenue of $647 million, representing a 72% increase year-over-year. This substantial growth was driven primarily by strong performance in our Bitcoin Mining business, which contributed $576 million or 89% of total revenue and supported by our Engineering and other revenues, which contributed an additional $71 million or approximately 11% of total revenue.

Our Bitcoin Mining business achieved its highest annual revenue and gross profit on record with fiscal year 2025 revenue of $576.3 million and gross profit of $294 million when including power curtailment credits. This performance reflects the scale and ongoing efficiency improvements in our operations, including our industry-leading power strategy. Net loss for the year was $663 million or $1.95 per diluted share. Now it's important for investors to understand the components behind this result.

This net loss reflects several significant noncash charges and mark-to-market pricing adjustments on Bitcoin held on our balance sheet, including depreciation and amortization expense of $346.8 million, stock-based compensation expense of $125.7 million, a $158.1 million loss on contract settlement with Rhodium and unrealized mark-to-market adjustments on our Bitcoin holdings of $115.9 million as required by FASB accounting standards. Non-GAAP adjusted EBITDA for the year was $13 million when adjusted for noncash and unusual items. Non-GAAP adjusted EBITDA eliminates the effects of certain noncash and nonrecurring items that do not reflect our ongoing strategic business operations. and provides investors with a clear view of our underlying operational performance.

Our net cost of power for 2025 was $0.037 per kilowatt hour, representing one of the lowest power costs in our industry. Our power strategy generated power curtailment credits totaling $56.7 million for the full year, equivalent to nearly $10,000 per Bitcoin mined. This power strategy remains a critical competitive advantage for Riot. Turning to our Bitcoin Mining operational metrics.

We produced 5,686 Bitcoin during 2025, equivalent to production of 15.3 Bitcoin per day on average. This represents an 18% increase compared to the 4,828 Bitcoin we produced in fiscal year 2024. We ended the year with 18,005 Bitcoin on our balance sheet with a year-end value of $1.6 billion based on the closing price of $87,498 per Bitcoin on December 31, 2025. Our hash rate deployed reached 38.5 exahash by year-end, accounting for approximately 3.5% of the global network hash rate. This represents a 22% increase from the 31.5 exahash we ended fiscal year 2024 with, approximately matching the pace of global network hash rate growth and maintaining our significant share of the overall network.

Our cost to mine per bitcoin was $49,645 for 2025. While this increased from $32,216 in 2024, it's important to contextualize this in the broader industry environment. The average global network hash rate increased 47% year-over-year, from 630 exahash to 923 exahash. Despite the significant increase in network difficulty our vertical integration and power strategy continued to drive industry-leading cost efficiency relative to our peers. Hash rate utilization averaged 87% for the year, a significant improvement from 70% utilization in 2024. This improvement reflects the operational excellence initiatives our teams have implemented across our facilities.

Our Engineering business continues to demonstrate significant strategic value for Riot and represents a key component of our vertical integration strategy. Engineering backlog reached a record $224.6 million at the end of 2025, up dramatically from $55.9 million at the end of 2024, representing a 302% increase over the course of the year. The data center sector represents 90% of our current backlog, reflecting both the strength of industry demand and the positioning of our Engineering business to capture it. ESS Metron manufactures low- and medium-voltage switchgear and power distribution centers.

These are components that are essential for data center development and power distribution. As industry analysts have noted, transformer and switchgear lead times have quietly become one of the defining constraints in modern data center development. These are the hidden bottlenecks shaping 2026 project schedules industry-wide. Our Engineering business creates significant operational advantages for Riot.

By vertically integrating the manufacturing of these critical components, we reduce procurement risk improve speed to market and maintain control over equipment that is in short supply across the industry. Additionally, our servicing and maintenance expertise improved start-up and commissioning processes, enhances uptime, and extends the life cycle of our equipment. This work generates significant CapEx savings across Riot platforms development activities. Since our acquisition of ESS Metron in December 2021, Riot has already realized $23.2 million in cumulative CapEx savings on equipment purchases alone.

And we expect these synergies to continue to scale as we expand the scope of our data center development further. With that, I will now turn the call back over to Jason Les to discuss how all this translates to Riot's valuation rerating opportunity and our path forward.

Thank you, Jason. Slide 19 presents enterprise value per megawatt multiples across selected peers in our sector, which we view as a useful lens for how the market values power portfolios today. Riot currently trades at approximately $2.2 million for 2027 available megawatt. This represents a significant discount compared to peers with signed data center leases despite us having 1 of the largest fully approved and readily available power portfolios in the industry.

We do not just view this as a discount. We view this as a clear road map for shareholder value creation. The signing of our AMD lease is the first milestone towards a rerating of the underlying value of our power portfolio from a data center perspective. As we continue executing our data center strategy and converting additional megawatts into contracted data center leases with creditworthy tenants, we anticipate the market will increasingly rerate the value of our assets leading to multiple expansion on our valuation.

I want to conclude today's call by reinforcing why we believe Riot is uniquely positioned to create substantial long-term value for our shareholders. The opportunity in front of us is significant. Data center demand continues to grow rapidly, driven by the AI revolution and the accelerating need for high-density compute. At the same time, power remains the binding constraint with time lines for new capacity extending further every year.

Riot is on the right side of both of these trends. We control one of the most compelling fully approved power portfolios in North America located in exactly the right markets and available for development today. Our Rockdale and Corsicana campuses with a combined 1.7 gigawatts of firm energized power, give us a scalable strategic platform that is exceptionally difficult to replicate. As we execute our strategy, we are aiming to systematically convert that power into long-term contracted data center cash flows with creditworthy tenants.

The AMD lease is an important proof point of this approach. It validates our team, our sites and our development model, and it is the first step in building a diversified portfolio of high-quality leases that can support potential portfolio NOI in the range of $1.6 billion to $2.1 billion upon full buildout. Our focus from here is clear, continue to execute with discipline, deepen and expand our tenant relationships, secure attractive long-term project financing and recycle capital into the next wave of development. As we demonstrate repeatable execution of this model, we expect the market to increasingly recognize the quality and scale of our platform and to rerate Riot valuation to better reflect the strength of our underlying assets and contracted cash flows.

We are in the early innings of transforming Riot into one of the most meaningful digital infrastructure platforms in the industry. On behalf of our entire management team, I want to thank our shareholders, our partners and our employees for their continued support as we execute against this opportunity. Before we open the line for questions, I would like to take a moment to recognize an important leadership transition at Riot. First, I want to sincerely thank Colin Yee for his leadership and service as our Chief Financial Officer since 2022. Colin has played a vital role in strengthening Riot's financial foundation, building out our internal reporting infrastructure and guiding the company through several key phases of growth.

We are grateful that Colin will continue to support Riot as a senior adviser, and we look forward to benefiting from his counsel as we execute on our long-term strategy. At the same time, I am very pleased to officially welcome Jason Chung as Riot's new Chief Financial Officer. Jason joined Riot in 2022 as our Head of Corporate Development and brings nearly 2 decades of experience in investment banking and corporate finance. And he has already been instrumental in shaping our capital market strategy, corporate development, and investor relations efforts.

Consolidating our finance and strategy functions under Jason's leadership will further align our capital allocation framework with the growth ambitions of our data center platform. With that, we will now open the call up for questions. Operator?

[Operator Instructions] Our first question comes from Paul Golding with Macquarie.

Congrats on all the progress with delivering the first 5 megawatts. I wanted to ask, around the AMD lease and how things are progressing there, have you come away with any best practices or interesting takeaways like gating factors on conversion with the first 5 megawatts that you're putting to work on the next phase of delivery. And maybe as part of that question, how conversations may be progressing with the expansion and right of first refusal with AMD? And then I have a follow-up.

Thanks for the question, Paul. So I would say the first key lesson is a validation of our commercial approach where we start the conversation with a discussion and understanding of what our customer is looking for and exactly how we're going to deliver that. We think that is an important foundation for approaching these discussions so that we ensure that we can deliver exactly what the customer is looking for on the timeline that they need. So I would say that was the approach that we took with AMD and the fact that we've been able to deliver on such an aggressive timeline is validation of that.

I think another thing it validates is the strategic advantage of our internal engineering capability. A huge part of how we were able to deliver for AMD on such an accelerated timeline was the fact that we have the internal capability to engineer and manufacture low medium voltage switchgear and other important power components for data center development. So Riot's ESS Metron was one of the biggest suppliers to the development for the capacity that we are leasing to AMD. So I would say it's more of a validation of our approach than anything.

And it is a playbook that we are looking to take for -- to the rest of our pipeline and employ that same playbook, the same strategy to ensure that we are giving our customers what they want, and we are meeting the timelines that we agreed to. As far as expansion goes, I don't want to comment on specific discussions, but I would say that we are very encouraged by our partnership. I believe that delivering on the initial 2 phases on our aggressive timeline is an important step in growing that partnership. The way we think about the AMD relationship is not a one-off deal.

We are aiming to build a sophisticated long-term infrastructure partnership with a well-capitalized and high creditworthy company, such as AMD, as they build out infrastructure to support their AI road map. And the only way that we can build that partnership is if we deliver and meet our commitments to our customer AMD. So that's what we're focused on there. And of course, if expansion options are realized in the future, we'll be updating the market on those -- when those announcements can be made.

And then you did mention that you're in discussions on financing. I guess given all the commentary in the marketplace around private credit, how are discussions progressing? Any additional color you could provide would be super helpful on available liquidity in the marketplace, cost of capital or anything around that?

Sure. I'll turn that question over to Jason Chung, our CFO.

Thank you, Jason. We've been actively engaging with a number of different banks across the board and of course, have been keeping a close eye on developments in the debt capital markets in parallel. I think when we think about the AMD lease itself, we're really talking about 2 distinct risk profiles within the same lease. There's the initial stabilized portion of the deployment and second to that is the future expansion option itself.

And so when it comes to the first portion, that's stabilized deployment, we anticipate that given the highly predictable contracted cash flows of the initial 25-megawatt deployment backed by AMD's strong credit. We think we can get a really low cost of capital that essentially removes the development or execution risk that lenders would typically price in. Then when it comes to the second portion on the expansion option that could potentially be structured as sort of a separate delayed draw type facility, specifically intended to support AMD's 75-megawatt expansion development. So by separating these 2 distinct credit profiles, what we're able to do is avoid paying a blended sort of construction premium across the entire facility.

And so we think that will really result in 3 particular outcomes. The first is we should be able to get a significantly lower overall cost of capital on a facility like this. The second is that it will allow us to pull out our initial equity and the third is that will enable us to efficiently recycle that capital to finance additional growth CapEx in the future. So when it comes to discussions with the banks right now, this is where our primary focus is on we're seeing an incredible amount of liquidity and depth in the project finance markets.

And we think that the interest in exploring an opportunity to partner with Riot on this type of facility is very strong.

Our next question comes from John Todaro with Needham & Company.

Congrats on the progress with AMD and then also some of the additional stuff going on at Corsicana. I was wondering if we could just drill a little bit more into that leasing pipeline, the demand environment, how those conversations have evolved and kind of any timeline guardrails or just how advanced those discussions are? And then I have a follow-up as well.

Sure, John. So kind of set the stage, we have 1.7 gigawatts of approved power capacity in Texas. And as we see the industry develop, that asset becomes more scarce and more appreciating. So our responsibility here to shareholders is to maximize the value of that capacity, and that's what we're focused on.

I want to zoom out and take a look -- reflect on the road map that we've been on. On our second quarter '25 earnings call, we outlined that the next step we were doing was completing our basis of design, and that would lead to technical discussions with the market. And then on our Q3 '25 earnings call, we shared our basis of design that had been completed and that we were initiating technical discussions, engineering discussions with various customer segments out there. We've done that.

We've been able to enhance our design as a result of those discussions. And now we are in the commercial phase. We are in active conversations with multiple parties. That's across hyperscaler, enterprise, neocloud and AI customer segments.

The AMD deal validated us as a credible counterparty. And I'd say that has materially increased the quality and the seriousness of the inbound interest that we've received. Now of course, it's difficult to predict the exact timing for leases. We are preparing these deals can go through different phases.

We've heard our peers talk about it's stopping and starting -- starting and stopping with various different deals before they got to the final one. But we are absolutely targeting additional announcements in 2026. We believe we are incredibly well positioned to execute on that, and we will disclose more details when we are in a position to do so.

That's great. That's very helpful. And I know from the prepared remarks, you said these sites could go single tenant or multi-tenant, is there a preference from you guys? Do you want to kind of mix in a couple of these different segments or hyperscaler does have demand for the whole thing? Would you prefer that?

Yes. That's a good question. In the prepared remarks, what we wanted to highlight is that we have the flexibility here. The way our campuses are laid out, they can be single tenant or they can be multi-tenant campuses.

We have optionality to maximize the value of our assets here. And that being said, our focus is on high creditworthy counterparties. And in Corsicana, for example, while we have the flexibility to accommodate multi-tenant, I can tell you all of the real interest so far from potential customers has been for the entire site. So I tend to believe that is the most likely outcome for a leasing scenario at Corsicana.

Perhaps it ends up being different in the end. Perhaps there's a mix at Rockdale. The important thing is getting good quality leases with good quality counterparties and we have flexibility in how we put that together to end the -- to create the final tenant composition of a site, whether it's one or more tenants.

Our next question comes from Reggie Smith with JPMorgan. Reggie, your line might be on mute. Our next question will come from Mike Grondahl with Northland.

With all the questions around ERCOT recently. I believe Riot's power is approved at Corsicana. But can you confirm that. And then secondly, does ERCOT's batch process affect Riot in any way going forward sort of positively or negatively?

Thanks for the question, Mike. So the short answer to your question, the power at Corsicana has been completely approved. We received that approval back in the fourth quarter of 2022. So that site is in operation, received the approvals back then, and we are fully available to scale up to our 1 gigawatt from there when we're ready. The batch process does not impact Riot.

The new ERCOT batch process that was proposed, not implemented, pertained to loads that had been in different stages of the planning or approval process already before final approval and certainly before energization. So that would affect new sites that have not been energized would not impact Riot sites that have been approved for years and have already been in operation. So we think that just further validates the value of these sites, the fact that they're already approved, and we don't have that same level of risk for them.

Our next question comes from Stephen Glagola with KBW.

Just a quick one for me. On the financing side, can you just talk about how Bitcoin sales are going to continue or not continue to play a role in funding the CapEx going forward here.

Thanks, Stephen. I'll turn that over to Jason Chung.

Thanks, Jason. On our financing plan, our funding hierarchy, if you will, starts with the Bitcoin treasury. So in addition to selling all of our ongoing Bitcoin monthly production, we have and will continue to sell Bitcoin directly from our balance sheet in order to fund our operational needs and growth CapEx. So one clear example of this was when we announced the acquisition of the Rockdale site, the $96 million consideration was funded entirely through the sale of nearly 1,100 Bitcoin off the balance sheet, and we'll continue to do so going forward.

That being said, our strategic evolution towards data center development also opens up access to new pools of low-cost capital. So you should expect to see us look to tap into these lower cost non-dilutive debt structures as well to fund our build-out in conjunction with our Bitcoin sales off the balance sheet. We believe this combination is the most accretive financing strategy for our shareholders going forward.

Our next question comes from Nick Giles with B. Riley Securities.

Yes, I want to commend Colin and congratulate you, Jason Chung on your appointment. My question was really just how you're thinking about M&A of new sites and how that could have shifted recently? Have these aircraft developments change things. Some of your peers are either talking about and have already taken action towards adding generation capabilities on site.

So is that something you'd consider? Or are you really only interested in opportunities with greater interconnection are ones that really don't require you to operate the generating assets.

Nick. So thanks for the question. As far as developing pipeline goes, there's a question earlier about the ERCOT batch process. Besides that, we've seen it becoming increasingly difficult for new grid interconnections to be approved.

So that's to be a double-edged sword in our case. On 1 hand, that makes it harder to get new grid interconnections approved. On the other hand, it makes our massive existing portfolio already that more valuable. And so when we think about our pipeline, the first thing that we're mindful of is we have a massive pipeline in front of us.

We have nearly 2 gigawatts, 1.7 gigawatts just between Rockdale and Corsicana, 2 mega flagship sites that we're able to act on. That is an enormous value creation opportunity for Riot in and of itself. That being said, we are thinking for the long term. We're not just trying to monetize 2 sites here, we are building a durable platform, like, durable data center business, and we want to have a repeatable process for future sites.

We repeat the process like we've demonstrated with AMD. We have been evaluating an enormous amount of opportunities. You can imagine, there's lots out there. It goes through a very intensive process within our organization, and we filtered down to a few, and we are now involved in several active processes to acquire potential new developments.

But I think you raised a really good point on generation. I think the environment that we're in, where it's difficult to procure additional power capacity means that you need to be more creative in how you are solving that problem. It can't just be relying on grid power. The future of this industry is clearly bringing your own power.

That is an area where I think Riot has a tremendous advantage, a lot of our engineering team and operations team come from a generation background. So I can tell you this is something we are looking at very closely and taking very seriously and using all of the resources at our disposal to help build that durable pipeline for us to continue replicating our success on.

Jason, appreciate that perspective. My second question was you've proven your ability to generate revenue very quickly through the AMD contract. That being said, there's still a really high degree of urgency in the market around other megawatts. So my question is really, are there ways that you could accelerate the ultimate energization of data center megawatts in either asset?

And we kind of have the 112-megawatt target at Corsicana, but can you give us a sense for maybe how many kind of energized data center megawatts could be brought online by '27.

Yes. Nick, the very reason that we initiated on that core and shell development without a lease in hand was to ensure that we could deliver capacity starting in 2027 and be very competitive with our offering there. Those first 2 buildings, that is just the beginning. We are obviously in a commercial process and we are looking -- we are out there marketing and attempting to lease the entire site.

And ultimately, we'll have a build strategy reflective of what our customer requirements are. But we have these processes underway. To further enhance our ability to deliver timely, we have begun procuring long-lead equipment. In fact, we procured most of the more supply-constrained long-lead equipment that you would need for those first 2 buildings.

So when we are having commercial discussions, it's not about 112 megawatts. It's about how we are delivering the full capacity, the 1 gigawatt of utility load available at that site, and those are just the initial parts of that deployment, but we are ensuring we can be very competitive with the delivery time line.

Great. Well, I appreciate all the detail and keep up the good work.

Our next question comes from Reggie Smith with JPMorgan.

My first question is kind of a follow-up to the last point you made, Jason. Obviously, you guys have a massive site that's right outside of Dallas, and your peers have talked about, I guess, contract terms and discussions seem to be getting better where operators are getting better and better economics. A question for you is thinking about that site and something that I've been telling investors for a while now. I kind of want to verify, your proximity to Dallas.

Like is there a premium? Or can you extract or get a premium for that proximity, how do you think about valuing that element of it and even the size of the site. There aren't many gigawatt sites for sale or for lease rather out there. So how do you think about those features of your property and how you can price for that.

Obviously, you're dealing with top-tier tenants, and there's some negotiation back and forth there. But anything you could share about like how you guys think about that and how it should show up in any deal that you may sign?

Yes, Reggie, thank you for the question. So the attributes of the sites, the sizes, the proximity to Tier 1 markets, Corsicana in particular, it is not as much as an impact on deal economics. Well, I think there's some impact there. The bigger point is the impact it has on the types of tenants that we're able to attract there.

The types of tenants that we want to enter into leases with, the types that we can get strong financing and the best valuation multiples off of, they are the tenants that are more selective on location, and they are looking to be placed closer to the Tier 1 markets. That, I think, is the biggest factor there is it's widen the doors of the conversations that we're able to have to the best names out there.

Got it. That makes sense. And then if I could get one quick follow-up. Thinking about kind of milestones, both on the development side and even like contract discussions, what are some of the key things that maybe internally you guys are looking for on the contract side that lets you know that, hey, this is progressing.

Maybe educate us on like how those discussions progress and play out. And then again, on the development side, like what should we be looking for over the next couple of quarters to let us know that, hey, the site's being developed on time, et cetera. So anything you can share there would be fantastic.

Yes. So I think that's an important indicator of the serious discussions is how much they end up going to a technical product discussion and how quickly they do. I think that is a strong indicator of how serious the counterparty is with moving forward. That's what we've taken the approach that we have.

We wanted to ensure that we had a technically sound offering a product that hyperscaler and high creditworthy investment-grade tenants we're looking for. So the level of technical interest, the level of details that we're getting into for us is a signal of the seriousness of what's going on. But we are very focused on leasing these sites with the right agreements as quickly as we can. So we've been cautious to keep our optionality open.

We're engaging, obviously, with multiple counterparties at once to ensure that we can move along in a timely fashion and deliver high-quality outcome for shareholders as quickly as we can.

Our last question comes from the line of Greg Lewis with BTIG.

Thanks for squeezing me in here. I guess, Jason, you mentioned that a few times on the call about the benefit of ESS Metron and that acquisition. I guess I'd be curious, it's clearly good to have that inside the portfolio. But as we try to think about the benefits of ESS Metron, is that -- could -- is that more of a speed to market?

Or could we actually also see it potentially make projects more economically compelling, i.e., lower upfront costs maybe than some of your competitors?

That's a good question, Greg. For us, the main benefit has been strategic and supply chain visibility. I touched on it on the earlier question from Paul about delivering from AMD. The only way that we were able to do that to deliver on that timeline that AMD needed was having this internal engineering and manufacturing capability, where we could develop a customized solution and prioritize that overall other work out there.

No other third-party OEM would be able to do that for Riot or want to do that for Riot. So it has really changed the way in what we're able to offer solutions for customers. And I'll tell you, from the recruiting standpoint, building a high-quality team here is obviously very important for delivery and execution on the data center strategy, a lot of the talent that we've recruited has been particularly compelled and interested by the capabilities that we have with ESS Metron and E4A. So the people that live and execute this for us, they certainly see the benefit for this as well.

So supply chain strategic, but there is a cost savings there as well. On one of our slides showed that since we've acquired ESS Metron, we've saved approximately $23 million on CapEx since that acquisition. We did that acquisition 4 years ago for approximately $52 million in consideration and we've nearly recouped half of that already just in CapEx savings. And that -- those savings have only been realized on relatively smaller scale Bitcoin mining developments and now this AMD development as well.

When you talk about the broader development in front of us building out 1 gigawatt of utility capacity at Corsicana and eventually, all 700 megawatts of capacity at Rockdale. That's substantially more business than we've done with ESS Metron in the past. So presumably, the CapEx savings would even be more considerable over the term of that larger and longer-term project.

That concludes today's question-and-answer session. I'd like to turn the call back to Jason Les for closing remarks.

I want to thank all of our shareholders, investors, analysts for coming on to our call today. Appreciate all the questions, materials available on our website, and our IR team is available for any follow-up questions. We look forward to continue executing on the incredible opportunity in front of us, and we will speak with you again next quarter.

This concludes today's conference call. Thank you for participating. You may now disconnect.