Marathon Digital Holdings, Inc., a US-based Bitcoin mining company, reported mixed financial performance in the first quarter of 2024.
This period brought significant growth in hash rate and revenue. Then Marathon also presented several operational and financial challenges
Marathon Digital faced difficulties amid growth
Marathon’s revenues for the first quarter of 2024 were up 223% compared to the first quarter of 2023, reaching $165.2 million. As a result, the mining company’s net profit increased 184% to US$337.2 million compared to the same quarter in 2023.
Additionally, the company produced 2,811 Bitcoin, a 28% increase compared to the first quarter of 2023. However, compared to the fourth quarter of 2023, this number represents a reduction of approximately 34%.
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Failures impacted Bitcoin mining
Fred Thiel, CEO of Marathon Digital, explained the reason behind this. He cites unexpected equipment failures and maintenance issues that negatively affect the company’s Bitcoin mining above all.
“Bitcoin production and therefore revenues generated during the quarter were negatively impacted by unexpected equipment failures, transmission line maintenance, and higher than anticipated weather-related restrictions in Garden City and other locations during the quarter ”, stated Thiel.
In fact, Marathon’s Bitcoin production lags behind Core Scientific, another US-based Bitcoin mining company. Core Scientific recorded 2,825 Bitcoins (BTC) mined during the first quarter of 2024.
Despite the challenges, the beginning of 2024 was positive for Marathon
However, the start of 2024 was a period of notable expansion for Marathon Digital. The company reported a 142% increase in its powered hash rate, reaching 27.8 exahash per second (EH/s). In fact, the number is higher than the 11.5 EH/s recorded in the same period last year.
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The mining company also expanded its technological infrastructure and product offerings. This quarter saw the introduction of Anduro, a new multi-chain Bitcoin layer-two network. Anduro’s goal is above all to promote the development and adoption of Bitcoin.
Additionally, Marathon has launched several innovative products to improve the efficiency and performance of Bitcoin mining operations. Among them, for example, are Slipstream, a service to speed up Bitcoin transaction confirmations, and MARA UBC 2100, an in-house developed control board to optimize mining operations.
First and foremost, the company aggressively pursued expansion through acquisitions. It has added more than 1.1 gigawatts to its mining capacity.
Strategic expansion to mine Bitcoin
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Notably, 54% of this capacity is now under Marathon’s direct control and operation. This strategic expansion, therefore, is in line with Marathon’s ambitious goal. It aims to increase its hash rate to 50 EH/s by the end of 2024, doubling its current capacity.
However, Marathon’s overall performance for the quarter missed Zacks Equity Research analyst estimates. The company’s reported revenues missed the Zacks Consensus Estimate by 14.80%. This led Zacks to adjust the current status rating on shares of Marathon Digital (MARA) to “hold.”
Marathon Digital (MARA) stock price fell following the earnings report. During after-hours trading, MARA’s price dropped to $18.60 on May 9. Over a longer period, MARA price has fallen 14.30% year-to-date.
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