Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.21.2
Segment Information
 9 Months Ended
Sep. 30, 2021
Segment Reporting [Abstract]  
Segment Information

Note 16. Segment Information

The Company applies ASC 280, Segment Reporting, in determining its reportable segments. The Company has two reportable segments: Cryptocurrency Mining and Data Center Hosting. The guidance requires that segment disclosures present the measure(s) used by the Chief Operating Decision Maker (“CODM”) to decide how to allocate resources and for purposes of assessing such segments’ performance. The Company's CODM is comprised of several members of its executive management team who use revenue and cost of revenues of both reporting segments to assess the performance of the business of our reportable operating segments.

37

Riot Blockchain, Inc. and Subsidiaries

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited)

No operating segments have been aggregated to form the reportable segments. The Company does not allocate all assets to the reporting segments as these are managed on an entity-wide basis. Therefore, the Company does not separately disclose the total assets of its reportable operating segments.

The Cryptocurrency Mining segment generates revenue from the cryptocurrency the Company earns through its mining activities. The Data Center Hosting segment generates revenue from long-term customer contracts for the provision/consumption of electricity, construction of infrastructure, operation of data centers and maintenance/management of computing capacity from the Company’s high performance computing facility in Rockdale, Texas.

All revenues are from external customers and no single customer or related group of customers contributed 10% or more of the Company's total revenue during the three and nine months ended September 30, 2021 and 2020.

Through September 30, 2021, approximately 90% of the Company’s cryptocurrency mining revenue was generated from the Coinmint Facility in New York, and 100% of the Company’s data center hosting revenue was generated from the Whinstone Facility in Rockdale, Texas.

The following table details revenue and cost of revenues for the Company's reportable segments for the three and nine months ended September 30, 2021 and 2020, and reconciles to net income (loss) on the condensed interim consolidated statements of operations:

38

Riot Blockchain, Inc. and Subsidiaries

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited)

Three Months Ended

September 30,

Nine Months Ended

September 30,

2021

2020

2021

2020

Reportable segment revenue:

Revenue, net - cryptocurrency mining

$

53,590

$

2,437

$

108,213

$

6,717

Revenue, net - data center hosting

11,193

-

14,067

-

Other revenue

25

25

73

73

Total segment and consolidated revenue

64,808

2,462

122,353

6,790

Reportable segment cost of revenue (exclusive of depreciation and amortization shown below):

Cost of revenues - cryptocurrency mining

13,034

1,302

29,893

4,149

Cost of revenues - data center hosting

12,581

-

16,317

-

Total segment and consolidated cost of revenues (exclusive of depreciation and amortization shown below)

25,615

1,302

46,210

4,149

Reconciling Items:

Acquisition-related costs

(552

)

-

(18,894

)

-

Selling, general and administrative

(40,307

)

(2,000

)

(47,971

)

(7,964

)

Depreciation and amortization

(12,207

)

(1,267

)

(20,791

)

(2,761

)

Change in fair value of derivative asset

9,920

-

27,456

-

Change in fair value of contingent consideration

(259

)

-

(444

)

-

Impairment of long-term investment

-

-

 

-

(9,413

)

Impairment of cryptocurrencies

-

-

(17,507

)

(989

)

Reversal of registration rights penalty

-

-

-

1,358

Gain (loss) on sale of equipment

-

(5

)

-

31

Interest income

40

12

295

27

Other income (expense)

(85

)

(2

)

1,425

(5

)

Realized gain on sale/exchange of long-term investment

-

-

26,260

-

Realized gain on sale/exchange of cryptocurrencies

65

385

94

491

Unrealized loss on marketable equity securities

(11,151

)

-

(10,812

)

-

Deferred income tax expense

-

-

(3,730

)

-

Net income (loss)

$

(15,343

)

$

(1,717

)

$

11,524

$

(16,584

)