Bitcoin Miner Riot Takes $349M Goodwill Impairment Charge on Acquisitions

The company also posted an impairment charge of $99.8 million on its bitcoin holdings.

AccessTimeIconAug 16, 2022 at 10:05 p.m. UTC
Updated May 11, 2023 at 4:18 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Riot Blockchain (RIOT), one of the largest publicly traded bitcoin (BTC) miners, recorded $349.1 million in impairment charges to goodwill in the second quarter, tied to its acquisitions of miner Whinstone U.S. and electrical equipment provider ESS Metron in 2021. In its second-quarter earnings released on Monday after the close, it also reported an impairment charge of $99.8 million on its bitcoin holdings.

Large impairment changes have been a common occurrence for miners as the prices of cryptocurrencies have plummeted this year. Most recently, peer Marathon Digital (MARA) said it booked $127.6 million impairment changes in the second quarter due to the decline in the prices of digital currencies.

“Although challenging global market conditions in the second quarter, further impacted by a steep decline in the price of bitcoin and resulting decline in market valuations for publicly traded bitcoin miners, including Riot, necessitated non-cash impairment charges this quarter, these non-cash charges had no impact on our solid financial position and ample liquidity, both of which were further strengthened this quarter,” said CEO Jason Les in a statement.

The miner was scheduled to report its earnings last week, when most of its peers released their results. However, Riot said on Aug. 9 that it delayed its quarterly earnings report because it needed more time to calculate how much the cryptocurrency rout, the war in Ukraine and other macroeconomic issues have reduced the value of its assets.

Riot maintained its hash rate growth guidance of about 12.5 exahash per second (EH/s) by the first quarter of next year, which it first forecasted on Aug. 3.

Riot also reported total first-quarter revenue of $72.9 million, missing consensus estimate of $75.5 million, according to FactSet data. It currently has 44,720 bitcoin miners, with a hash rate capacity of 4.4 EH/s.

Riot shares fell about 6% on Tuesday. Its stock has fallen about 60% this year, in-line with its mining peers, while bitcoin’s price has been cut nearly in half.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Aoyon Ashraf

Aoyon Ashraf is managing editor with more than a decade of experience in covering equity markets


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.