Riot Platforms (RIOT) Q3 2026 earnings review
Riot signs a $28 billion AI lease while mining shrinks
Riot locked in a single artificial intelligence tenant for its entire Corsicana campus while its older bitcoin mining business shrank. Chief executive Jason Les signed a 15-year lease covering 910 megawatts for $28 billion, lifting total contracted data center revenue nearly fourfold to $38 billion. Selling most of its bitcoin raised $1.5 billion this year, let the company pay off its $200 million Coinbase loan, and held quarterly revenue steady at $181 million.
| Contracted data center revenue | $38B $9.8B last quarter (1,151 MW vs 241 MW) |
|---|---|
| Revenue | $181.4M +0.7% from a year ago |
| Cash and bitcoin liquidity | $950.2M $200M Coinbase loan repaid in full |
| Contracted annual NOI outlook | Raised to ~$2.2B above prior $1.6–2.1B full-portfolio target |
⚖️ Verdict: 🟢 Bullish
The story got better because the Corsicana lease uses a powered-land structure that cuts construction costs per megawatt in half to $6 million and shifts server hall work to the tenant. Combined with converting its bitcoin stash into cash, the company removed its collateral risk and says it can fund its equity share without issuing new stock. One caution: neither the $180 million AMD bank loan nor the Rockdale long-term financing closed on schedule, and one unnamed AI lab now represents 98% of contracted revenue by our math.
The question now is whether Riot can close project debt on affordable terms in a tighter credit market and deliver 400 megawatts of powered pads by September 2027. If banks fund 80% to 90% of costs, cash on hand covers the build; if credit stays tight, the tenant funds reimbursements through rent credits at a 12% implied rate. Closing the Rockdale credit backstop and the AMD term loan will provide the first test.
🐂 Bull Case
Corsicana Lease Quadruples Contracted Data Center Revenue
Riot is converting its Texas power sites from bitcoin mining into data centers for artificial intelligence (AI). Chief executive Jason Les announced "a 15-year triple-net powered land lease with a leading Frontier AI Lab for the entirety of our Corsicana campus" ahead of his year-end target. This agreement covers 910 megawatts (MW) of critical IT capacity — electricity dedicated to computing servers — and adds $28 billion in contracted revenue.
- Total contracted data center capacity: 1,151 IT MW, up from 241 IT MW last quarter
- Total contracted revenue: about $38 billion, up from $9.8 billion last quarter
- Expected average annual net operating income (NOI, lease revenue minus direct operating costs): $2.2 billion across all three leases
This contract matters because it locks in a buyer for Riot's largest power asset and removes the risk of building empty shells. The tenant will pay about $1.8 billion in average annual rent regardless of how much power it uses, and two five-year extensions could lift the Corsicana contract to $54 billion.
What to watch: delivery of the first 400 MW phase of powered concrete pads at Corsicana in September 2027. Hitting that date starts rent within 60 days and proves the company can execute at scale.
Powered Land Structure Cuts Build Cost in Half
"With total capital costs of approximately $6 million per IT megawatt, the Corsicana development will require about half the capital of a Tier 3 build," Les said. Under a triple-net powered land lease, the tenant pays all operating and power costs while Riot builds only the land, substations, and powered concrete pads. The AI lab buys, installs, and owns the computing modules on those pads.
Because the customer handles the server halls, Riot spends up to $2 million per MW ($1.8 billion) on site work and reimburses the tenant $4 million per MW ($3.6 billion) only after each phase is delivered and paying rent. That lowers total Corsicana capital costs to $5.5 billion, compared with $11–12 million per MW for the traditional build at Rockdale.
What to watch: the Corsicana project debt launch in 2027. Securing 80% to 90% project debt would limit the developer's cash contribution across both Rockdale and Corsicana to $0.8–1.5 billion.
Bitcoin Sales Pay Off Coinbase Loan and Fund Build
Riot previously held onto its mined bitcoin as a treasury reserve and pledged 5,821 coins as collateral for a $200 million loan from Coinbase. As bitcoin prices fell from last year's highs, that loan created collateral risk while the company needed cash for construction.
During the first nine months of 2026, the infrastructure group sold 20,264 bitcoin for about $1.5 billion "primarily to fund data center development" — including 10,599 coins in the third quarter by our math. It also "repaid in full and terminated its $200 million Coinbase credit facility, releasing all pledged bitcoin" and leaving just 2,418 coins on the balance sheet. Because of those sales and the lower-cost Corsicana structure, Les said "we do not currently anticipate issuing equity to fund our announced projects".
What to watch: unrestricted cash, which rose 42% from last quarter to $669 million by our math. Keeping cash above the $0.8–1.5 billion project equity requirement prevents shareholder dilution.
🐻 Bear Case
Rockdale and AMD Financing Deadlines Slipped Again
Riot's plan to avoid issuing stock depends on borrowing 80% to 90% of construction costs through "non-recourse project debt sized to contracted rent" — loans backed only by the data centers, not the parent company. Last quarter, management expected to close a $180 million bank loan for the AMD site before the end of September and replace a $573 million Morgan Stanley bridge loan at Rockdale that matured on October 15.
Neither loan closed on time. The presentation states the company is still "Finalizing AMD Lease bank project financing process" and "Finalizing high investment grade credit backstop, Morgan Stanley interim facility remains in-place in the meantime". At Corsicana, if project debt is unavailable on market terms, the tenant will fund its own $3.6 billion reimbursement and recover it "as a credit against rent over the remaining lease term" at an implied interest cost of 12% per year.
What to watch: the closing and interest rates of the AMD term loan and the Rockdale credit backstop. Continued delays or 12% rent credits would eat into the $2.2 billion operating income target.
One Unnamed Tenant Now Represents 98% of Contracted Revenue
Signing the Corsicana lease solved the uncertainty around the site, but it concentrated almost all of Riot's future business into a single customer. Both the 191 MW Rockdale lease and the 910 MW Corsicana lease are with the same unnamed "leading Frontier AI Lab".
By our math, this single customer accounts for $37.1 billion, or 98%, of the company's $38 billion contracted revenue and $2.18 billion of its $2.23 billion expected annual net operating income. Furthermore, none of this tenant's rent starts until September 2027 at Corsicana and December 2027 at Rockdale, leaving a four-quarter gap before the new contracts change the income statement.
What to watch: the execution of the investment-grade credit support agreement for Rockdale. Until that guarantee is signed and disclosed, investors cannot verify the credit quality behind 98% of the lease book.
Bitcoin Mining Loses Money After Machine Depreciation
Until the AI leases start paying in late 2027, Bitcoin Mining still provides 64% of Riot's revenue. The company produced 1,637 bitcoin this quarter, up 16.4% from a year ago, and cut its direct cash cost to mine one coin by 15.2% to $39,265 with the help of $24.7 million in power curtailment credits (payments for pausing usage when the Texas grid is stressed).
However, the average bitcoin price fell 38.0% from a year ago to $70,855, pulling mining revenue down 27.9% to $116.0 million. When including $64.7 million of machine depreciation, the total cost to mine one coin was $78,805 — 111.2% of the coin's value — resulting in a fully costed mining gross loss of $37.7 million.
What to watch: bitcoin prices against the $39,265 cash mining cost over the next four quarters. If prices drop toward cash cost before late 2027, mining will stop generating cash for construction.
Engineering Margin and External Backlog Dropped
Riot's Engineering unit makes switchgear and electrical equipment through its ESS Metron and E4A Solutions subsidiaries. Segment revenue jumped 146.1% from a year ago to $47.0 million as factory capacity expanded, but total company gross margin excluding depreciation fell 19.9 percentage points to 36.4% because low-margin engineering and fit-out work grew while mining shrank.
- Engineering cost of revenue: rose 14.4 percentage points of total revenue from a year ago, cutting segment gross margin from 28.2% to 15.0%
- Data Center cost of revenue: added 6.2 percentage points of total revenue from a year ago on low-margin tenant fit-out work
- External engineering backlog: fell for a third straight quarter to $141.5 million, down 20.1% from last quarter
The company said it is "Strategically holding back capacity for Riot data center growth", which left implied new third-party orders at just $11.4 million this quarter by our math.
What to watch: Engineering gross margin next quarter. A rebound toward 27% would show the Q3 drop to 15.0% was project timing rather than higher manufacturing costs.
Risks this quarter didn't answer
Three standing risks from prior quarters either missed their target or had no full update in the earnings release and slide deck because the quarterly filing tables were not included.
- Stock-based compensation: fell to $21.4 million (11.8% of revenue, down 6.4 percentage points from a year ago), but missed the Q3 2025 target to drop to $8 million per quarter in Q3 2026.
- Convertible note dilution and share count: the release omits the balance sheet and share count table; the quarterly filing will show whether the 2030 convertible notes added shares.
- GMO legal claim and Corbert water line: neither the $646 million GMO lawsuit (trial set for January 2027) nor the Corsicana water line was mentioned; the filing's legal and commitment notes will update both.
👓 Other Themes
Tighter Credit Markets Complicate Project Debt
Riot noted that financing markets have tightened since September, citing a higher interest rate environment, wider credit spreads, and more selective lenders conducting deeper checks on tenant credit, power approvals, and construction track records. The developer is responding by structuring leases with take-or-pay rent and delaying Corsicana tenant reimbursements until after each phase is delivered and paying rent.
💲 Other KPIs
Recurring lease revenue jumped 68.7% from $4.9 million last quarter, reflecting the first full quarter of the 25 MW delivered to chipmaker AMD in May. Operating lease gross margin was 80.0%, compared with 6.3% on the $10.2 million of one-time tenant fit-out work, lifting total Data Center gross profit 11.3% to $7.2 million.
Total liquidity fell 21.8% from $1.21 billion last quarter as Riot paid off its $200 million Coinbase loan and funded construction. Because the company sold most of its bitcoin, total cash rose from $548.9 million to $748.2 million (including $79.2 million restricted), while bitcoin holdings dropped from 11,380 coins ($666.0 million) to 2,418 coins ($202.0 million).
🔮 Guidance
Raised. Adding the 910 MW Corsicana lease lifts projected annual lease revenue at full delivery in 2029 more than fourfold from the prior $520 million run-rate. By our math, the $17 million second-half 2026 forecast leaves about $8.7 million of operating lease revenue for Q4, up from $8.3 million in Q3 as 10 MW of AMD expansion capacity starts in November.
Raised. Signed leases across 1,151 IT MW now point to about $2.2 billion in average annual net operating income once fully delivered in July 2028, beating the $1.6–2.1 billion full-portfolio target set in Q4 2025 by $350 million at the middle of the range. The increase comes from the 99% NOI margin on the $1.8 billion Corsicana triple-net lease.
Raised. Total capital spending increases by $5.5 billion to add the 910 MW Corsicana build to the $2.1–2.3 billion Rockdale budget. Riot plans to fund $6.1–7.0 billion with project debt (80% to 90% of cost), leaving $0.8–1.5 billion of Riot cash equity to be deployed through 2028.
Cut. Total future machine depreciation stepped down by $52.8 million after Q3 recorded $64.7 million of depreciation and miner purchases slowed to $6.8 million. By our math, the $67.7 million remaining for 2026 is $1.1 million lower than the prior schedule implied for Q4.
❓ Key Questions
When will the Rockdale credit backstop and takeout debt close?
The $573 million Morgan Stanley interim facility had an October 15 maturity date and remains in place while the investment-grade credit support agreement is finalized. Investors need the closing timeline, interest rate, and backstop provider's rating.
Why is the $180 million AMD term loan still unclosed?
Management previously expected to close the AMD bank financing before the end of Q3 2026. Since that loan provides $180 million toward Riot's near-term liquidity plan, any hurdle on a stabilized investment-grade lease matters for future project debt.
Did the 2030 convertible notes increase the diluted share count?
The earnings release did not include the balance sheet or share count table. Because the $594 million of 2030 notes became convertible in Q3 with intent to settle in stock, investors need the updated diluted share count from the quarterly filing.
Why did stock-based compensation miss the $8 million Q3 target?
In Q3 2025, management stated that stock-based compensation would drop to about $8 million per quarter in Q3 2026 and end thereafter. The expense fell from $35.6 million in Q2 to $21.4 million in Q3, still nearly triple the target.
Why did Engineering gross margin drop from 27.5% to 15.0%?
Engineering revenue rose 26% from last quarter to $47.0 million, but segment gross profit fell 31% to $7.1 million while external backlog dropped by $35.6 million. Management should clarify how much manufacturing capacity is diverted to internal builds.