Marathon Digital Holdings, Inc.
(NASDAQ:MARA) ("Marathon"
or "Company"), a leader in supporting and securing the
Bitcoin ecosystem, today published unaudited bitcoin (“BTC”)
production and miner installation updates for September 2023.
Management Commentary
“We produced 1,242 bitcoin in September, which
is a 16% increase from last month and a 245% increase from
September of last year,” said Fred Thiel, Marathon’s chairman and
CEO. “The increase in bitcoin production from August was due to
improved uptime and decreased curtailment activity in Texas. In
September, our share of the bitcoin network’s available miner
rewards was a record 4.3%, up from 3.7% last month and the previous
record of 4.1% in July 2023.
“Energization of the facility in Garden City,
Texas is still pending. However, based on the latest updates, we
believe the facility will start to come online this month. While
our hosting provider completes the final steps to energize the
site, the Marathon team has focused on increasing uptime at our
other locations, especially in McCamey, Texas. By upgrading
equipment, leveraging our proprietary firmware, and making other
technical improvements, we increased our U.S. average operational
hash rate 20% month-over-month to 15.8 exahashes. We believe there
is still room for improvement at our McCamey site, and we are
working with our hosting provider to further increase uptime.
“Outside the US, our joint venture in Abu Dhabi
mined 50 bitcoin in September of which approximately 10 bitcoin is
our share. Construction is nearly complete at our second, larger
site, and we continue to expect the project’s full 7.0 exahashes to
be online before year-end 2023.
“In September, we opportunistically retired the
majority of our convertible debt at a significant discount. This
accretive transaction creates shareholder value and positions
Marathon to capitalize on any near-term turbulence in the Bitcoin
mining sector. With the next halving just over six months away, our
balance sheet is now a source of strength that allows us to focus
on further increasing efficiency and lowering costs.
“Our primary focus is still growth. Now that we
have reached our primary domestic growth target of 23 exahashes on
an installed basis, we are evaluating multiple opportunities for
our next 5 exahashes of hash rate capacity including international
locations with low-cost renewable energy. We expect to announce
specifics on our expansion plans in the weeks ahead.
“Lastly, I’d like to remind our shareholders to
vote in the upcoming Special Meeting of Shareholders, now scheduled
for November 10, 2023. We adjourned the previous meeting because we
did not receive enough votes to achieve a quorum. We also recently
provided more details about our Long-Term Incentive Plan or LTIP.
Please note our LTIP is solely based on Marathon stock price
performance relative to our closest peers which we believe to be
fully aligned with shareholder interests.”
Operational Highlights and
Updates
Figure 1: U.S. Operational Highlights
Metric |
|
9/30/2023 |
|
|
9/30/2022 |
|
|
% Δ |
|
|
9/30/2023 |
|
|
8/31/2023 |
|
|
% Δ |
|
Bitcoin Produced - U.S. Only |
|
|
1,232 |
|
|
|
360 |
|
|
|
242 |
% |
|
|
1,232 |
|
|
|
1,062 |
|
|
|
16 |
% |
Average Bitcoin Produced per Day |
|
|
41.1 |
|
|
|
12.0 |
|
|
|
242 |
% |
|
|
41.1 |
|
|
|
34.3 |
|
|
|
20 |
% |
Energized
Hash Rate (EH/s)1 |
|
|
19.1 |
|
|
|
3.8 |
|
|
|
403 |
% |
|
|
19.1 |
|
|
|
19.1 |
|
|
|
—% |
|
Average Operational Hash Rate (EH/s)2 |
|
|
15.8 |
|
|
|
NA |
|
|
|
|
|
|
|
15.8 |
|
|
|
13.2 |
|
|
|
20 |
% |
Installed
Hash Rate (EH/s)3 |
|
|
23.1 |
|
|
|
3.8 |
|
|
|
508 |
% |
|
|
23.1 |
|
|
|
23.1 |
|
|
|
—% |
|
1. Defined
as the amount of hash rate that could theoretically be generated if
all miners that have been energized are currently in operation
(includes miners that are temporarily offline for maintenance or
similar reasons). Hash rates are estimates based on the
manufacturers' specifications. All figures are rounded. |
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2. Defined
as the average hash rate that was actually generated during the
month from all operational miners. All figures are estimates and
are rounded. |
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3. Defined
as the sum of energized hash rate (see above) and hash rate that
has been installed but is not yet energized (e.g., miners are in
containers but not energized). Hash rates are estimates based on
the manufacturers' specifications. All figures are rounded. |
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The Company’s average fleet efficiency, based on
manufacturers’ specifications, was 25.2 J/TH (joules per terahash)
as of October 1, 2023. Once fully deployed, Marathon’s U.S. fleet
efficiency is expected to be approximately 24 J/TH, according to
the manufacturers’ specifications.
Figure 2: U.S. Operational Details by Site
Hash Rates
in EH/s |
|
|
|
Installed Hash Rate |
|
|
Energized Hash Rate |
|
|
Avg Operating Hash Rate |
|
|
Avg % of Energized |
|
Site |
|
State |
|
|
Host |
|
Aug 2023 |
|
|
Sep 2023 |
|
|
Aug 2023 |
|
|
Sep 2023 |
|
|
Aug 2023 |
|
|
Sep 2023 |
|
|
Aug 2023 |
|
|
Sep 2023 |
|
McCamey |
|
|
TX |
|
|
US
Bitcoin |
|
|
7.8 |
|
|
|
7.7 |
|
|
|
7.8 |
|
|
|
7.7 |
|
|
|
4.0 |
|
|
|
5.8 |
|
|
|
51 |
% |
|
|
75 |
% |
Ellendale |
|
|
ND |
|
|
Applied |
|
|
7.6 |
|
|
|
7.7 |
|
|
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7.6 |
|
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|
7.7 |
|
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|
6.6 |
|
|
|
6.6 |
|
|
|
87 |
% |
|
|
86 |
% |
Garden
City |
|
|
TX |
|
|
Applied |
|
|
4.1 |
|
|
|
4.1 |
|
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|
0.0 |
|
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|
0.0 |
|
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0.0 |
|
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0.0 |
|
|
|
0 |
% |
|
|
0 |
% |
Granbury |
|
|
TX |
|
|
US
Bitcoin |
|
|
1.9 |
|
|
|
1.9 |
|
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|
1.9 |
|
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|
1.9 |
|
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1.1 |
|
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1.5 |
|
|
|
56 |
% |
|
|
81 |
% |
Jamestown |
|
|
ND |
|
|
Applied |
|
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1.4 |
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1.4 |
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1.4 |
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1.4 |
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1.3 |
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1.2 |
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89 |
% |
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|
84 |
% |
|
Note: Table above does not include smaller sites
or the joint venture in the UAE
The Company continues to work with its hosting
providers on improving efficiency and increasing uptime
particularly in McCamey, Texas. September saw marked improvement
due to decreased curtailment and optimization efforts that included
upgrading equipment, leveraging our proprietary firmware, and other
technical improvements. Excluding curtailment, our staff has helped
increase uptime in McCamey, Texas by approximately 20% between July
and September.
Financial Highlights and
Updates
Figure 3: Financial Highlights
|
|
Year-Over-Year Comparison |
|
|
Prior Month Comparison |
|
Metric |
|
9/30/2023 |
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|
9/30/2022 |
|
|
% Δ |
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|
9/30/2023 |
|
|
8/31/2023 |
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|
% Δ |
|
Total Cash, Cash Equivalents, & Restricted Cash ($, in
millions) |
|
|
101.2 |
|
|
|
64.1 |
|
|
|
58 |
% |
|
|
101.2 |
|
|
|
111.2 |
|
|
|
-9 |
% |
Unrestricted Cash |
|
|
101.2 |
|
|
|
55.3 |
|
|
|
83 |
% |
|
|
101.2 |
|
|
|
105.5 |
|
|
|
-4 |
% |
Restricted Cash |
|
|
0.0 |
|
|
|
8.8 |
|
|
|
-100 |
% |
|
|
0.0 |
|
|
|
5.7 |
|
|
|
-100 |
% |
Total BTC
Holdings (in whole numbers) |
|
|
13,726 |
|
|
|
10,670 |
|
|
|
29 |
% |
|
|
13,726 |
|
|
|
13,286 |
|
|
|
3 |
% |
Unrestricted BTC Holdings |
|
|
13,726 |
|
|
|
6,841 |
|
|
|
101 |
% |
|
|
13,726 |
|
|
|
13,111 |
|
|
|
5 |
% |
Restricted BTC Holdings |
|
|
0 |
|
|
|
3,829 |
|
|
|
-100 |
% |
|
|
0 |
|
|
|
175 |
|
|
|
-100 |
% |
As of September 30, Marathon holds a total of
13,726 unrestricted BTC. With the increasing size of bitcoin
holdings, the Company expects to optimize its financial position
while retaining long-run upside. In September 2023, the Company
hedged 1,000 bitcoin using short-term enhanced costless collars,
protecting against downside risk while keeping the upside
potential. As part of our treasury operations, we may from time to
time evaluate and deploy low-cost hedging strategies to a portion
of our bitcoin holdings.
During September, Marathon opted to sell 800 BTC
and intends to sell a portion of its bitcoin holdings in future
periods to support monthly operations, manage its treasury, and for
general corporate purposes. The Company ended the month with $101.2
million in cash and cash equivalents on its balance sheet, all of
which was unrestricted. The combined balance of unrestricted cash
and cash equivalents and bitcoin increased from $188.2 million to
$471.2 million at September 30, 2023, when compared to the same
period last year.
Special Meeting of Shareholders November 10,
2023
Marathon Digital Holdings will hold a Special
Meeting of Shareholders on November 10, 2023 to consider and vote
on several corporate proposals. For more information, please see
the Schedule 14A filed with the Securities and Exchange Commission
on October 2, 2023 and linked here.
Investor Notice
Investing in our securities involves a high
degree of risk. Before making an investment decision, you should
carefully consider the risks, uncertainties and forward-looking
statements described under "Risk Factors" in Item 1A of our most
recent Annual Report on Form 10-K for the fiscal year ended
December 31, 2022, filed with the SEC on March 16, 2023. If any of
these risks were to occur, our business, financial condition or
results of operations would likely suffer. In that event, the value
of our securities could decline, and you could lose part or all of
your investment. The risks and uncertainties we describe are not
the only ones facing us. Additional risks not presently known to us
or that we currently deem immaterial may also impair our business
operations. In addition, our past financial performance may not be
a reliable indicator of future performance, and historical trends
should not be used to anticipate results in the future. Future
changes in the network-wide mining difficulty rate or Bitcoin hash
rate may also materially affect the future performance of
Marathon's production of bitcoin. Additionally, all discussions of
financial metrics assume mining difficulty rates as of October
2023. See "Forward-Looking Statements" below.
Forward-Looking Statements
Statements made in this press release include
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934. Forward-looking statements can be
identified by the use of words such as “may,” “will,” “plan,”
“should,” “expect,” “anticipate,” “estimate,” “continue,” or
comparable terminology. Such forward-looking statements are
inherently subject to certain risks, trends and uncertainties, many
of which the Company cannot predict with accuracy and some of which
the Company might not even anticipate and involve factors that may
cause actual results to differ materially from those projected or
suggested. Readers are cautioned not to place undue reliance on
these forward-looking statements and are advised to consider the
factors listed above together with the additional factors under the
heading “Risk Factors” in the Company's Annual Reports on Form
10-K, as may be supplemented or amended by the Company's Quarterly
Reports on Form 10-Q. The Company assumes no obligation to update
or supplement forward-looking statements that become untrue because
of subsequent events, new information or otherwise.
About Marathon Digital
Holdings
Marathon is a digital asset technology company
that focuses on supporting and securing the Bitcoin ecosystem. The
Company is currently in the process of becoming one of the largest
and most sustainably powered Bitcoin mining operations in North
America.
For more information, visit www.mara.com, or
follow us on:
Twitter: @MarathonDHLinkedIn:
www.linkedin.com/company/marathon-digital-holdingsFacebook:
www.facebook.com/MarathonDigitalHoldings Instagram:
@marathondigitalholdings
Marathon Digital
Holdings Company Contact:
Telephone: 800-804-1690Email: ir@mara.com
Marathon Digital Holdings Media
Contact:Email: marathon@wachsman.com
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