Jason Les: No, we are open to operating, I would say, in the United States and North America. We operate in Texas, because that has been the easiest pathway to growth, and we really like the power market here. We’re able to really achieve this industry-leading low cost of power here, which is just so critical in Bitcoin mining. That doesn’t mean those opportunities don’t exist elsewhere though. So we look at opportunities all over the country all the time. International opportunities, I think, to be determined, we’re seeing some interesting things in South America and elsewhere. But there’s other considerations always just besides power costs. So we look at a lot of things, but I think you could expect to see our growth in North America in the foreseeable future.
Regi Smith: Perfect. Thanks, guys. It was nice talking to you.
Jason Les: All right. Thank you, Regi.
Phil McPherson: And our next call comes from Lucas Pipes at B. Riley Securities. Lucas?
Lucas Pipes: Thanks very much, Phil. Good morning, everyone. So, my first question is back on the hosting side. And if we were to be on site today, would there still be machines from your former host or customers, or have they been removed? Thank you very much.
Jason Les: Yes, Lucas. So while we terminated our last two remaining hosting agreements in towards the end of 2023, one of those customers still remains operating on site. So for the first quarter, that accounted for about $3.2 million in revenue that was included in our Bitcoin mining revenue. And then their power cost of about $4.5 million was included in our cost of revenues for Bitcoin mining. So you would see that one remaining customer there performing. I’m sorry operating while we continue through the legal process here and try to get to a resolution.
Lucas Pipes: And the other one is fully out of your facilities at this point?
Jason Les: That’s correct. That’s correct.
Lucas Pipes: Thank you. And kind of taking a step back, would you consider going back into the hosting business or is the lesson learned here never again?
Jason Les: Yes, I think that’s the lesson learned here. Maybe I’ll say it a little more strongly than I would say it. I think we have seen the best use of this infrastructure and building new infrastructure is for growing our self-mining operations. We want to get maximum exposure to Bitcoin. We want to leverage our efficient cost of production over the wider scale possible. And I think expanding the hosting business really just takes away that valuable infrastructure pipeline, which I think generates the results and better grows our business, more what our shareholders are looking for. So we are not looking to grow the hosting business any further.
Lucas Pipes: Very helpful. Thank you. And then just to round this out, when you look at M&A, you mentioned earlier you are inquisitive if you build out a sophisticated corporate development team. Would you rule out any targets that have hosting agreements today? And more generally, what would the ideal target look like? Thank you.
Jason Les: Sure. Let me turn that back to Jason Chung, our Head of Corporate Development.
Lucas Pipes: Sure.
Jason Chung: Thank you, Jason, and thanks for the question, Lucas. Look we — in the M&A world, we see a wide variety of opportunities and it’s rare to see a target that 100% encapsulates everything you’re looking for. So sometimes there are situations where there’s an opportunity to make a deal, but it might come with some amount of hosting, for example, or other factors which may not completely tie to our overall strategy. And that’s something that we have to take into account when we evaluate some of these opportunities in the market. So I’d say that as long as an opportunity is able to check most of the financial and strategic and operational boxes, the criteria that we have, then we’ll consider it. That being said, at the same time, we are incredibly blessed at Riot to have an organic growth opportunity unlike others in the space.
And so ultimately we have to evaluate all these opportunities relative to our ability to control our own destiny at Corsicana and develop our pipeline with full control over what that looks like.
Lucas Pipes: Thank you. And in terms of size, what do you think is there a sweet spot either in terms of value dollars or kind of megawatts of capacity?
Jason Chung: I wouldn’t say there’s a specific sweet spot in size. We do look at opportunities across the spectrum. Obviously as a large-scale miner we like looking at large-scale opportunities that can move the needle. But I think there are some interesting businesses that aren’t necessarily large-scale that may be a little less appreciated by the market or kind of fly under the radar. And so there are some interesting deals that can be done on there as well.
Lucas Pipes: Really appreciate all the color and comments. Continue best of luck.
Jason Les: Thank you, Lucas.
Phil McPherson: Okay we’ve got time for one more question. Our last question is going to come from Owen Rickert at Northland Securities. Owen?
Owen Rickert: Hey guys, thanks for taking my question. I’m on for Mike Grondahl all the day. So just quickly, I guess, what’s your confidence level on getting to the 31 exahash by the end of the year? And what are some of the challenges you might face or you’re currently facing to get there?
Jason Les: Thanks for the question. I think we feel pretty confident about our ability to execute on that growth target. We’re taking things step by step here. I would say a lesson that we learned from Rockdale was rushing too fast to get every minor online as quickly as possible, kind of, often times you miss some steps that you have to come back and address later. So we’re very incrementally approaching the development here. The big milestone was energizing that substation. That was huge. We’re very proud of that. And now it’s a matter of just incrementally putting up these buildings, deploying the immersion equipment, and putting the miners in and going from there. So we’re making these deployments step by step and you can expect to just see this continue over the rest of the year.
