Marathon Digital Holdings, Inc.
(NASDAQ:MARA) ("Marathon"
or "Company"), a leader in supporting and securing the
Bitcoin ecosystem, reported its financial and operational results
for the quarter ended June 30, 2022.
Management Commentary“In the second quarter of
2022, we increased our bitcoin production 8% year-over-year,
producing 707 bitcoin, and we continued to install miners in Texas
in anticipation of energization as we worked through both
operational obstacles and a challenging macro environment,” said
Fred Thiel Marathon’s chairman and CEO. “Energization delays,
maintenance and weather issues in Montana, and an approximately 56%
decline in the price of bitcoin during the quarter, severely
impacted our bitcoin production and financial results. These items
reduced our revenues, caused us to record a $127.6 million
impairment on our bitcoin holdings, and decreased the fair market
value of our investment fund by $79.7 million. However, given the
groundwork we laid during the quarter and the progress we have made
since, we are optimistic that Marathon’s operational and financial
positioning is improving.
“Subsequent to the quarter’s end, we began energizing miners in
Texas after the power generator received the much-anticipated news
that the tax-exempt status of the wind farm had been confirmed. Of
the 68,000 miners that are being installed at this facility,
approximately 40,000, representing 3.9 exahashes per second, are
already installed and are now starting to be energized. With miners
currently coming online in Texas, we have increased confidence that
our bitcoin production may improve in the near term.
“During July, we also eliminated the uncertainty surrounding our
hosting requirements by securing enough hosting capacity to achieve
our prior target of 23.3 exahashes per second of compute power to
support and secure the Bitcoin network. From a financial
perspective, we further bolstered our liquidity position by
expanding our credit facilities with Silvergate Bank. Additionally,
we are in the process of upgrading our fleet so that, by the time
we achieve 23.3 exahashes per second we expect approximately 66% of
our hash rate be generated by S19 XPs, which are 30% more energy
efficient than the prior generation. With these upgrades, we
believe Marathon’s bitcoin mining fleet will not only be among the
largest, but among the most efficient on a per terahash basis.
Overall, this progress provides us with added confidence that we
remain on track to grow our position as a leader in supporting and
securing the Bitcoin ecosystem.”
Second Quarter 2022 Financial ResultsThe
Company recorded a net loss of $191.6 million, or $1.75 per share,
during the quarter compared with net loss of $108.9 million, or
$1.09 per share, in the prior-year period. The deeper net loss was
primarily related to the decline of bitcoin’s price in the second
quarter of 2022 and the accelerated recognition of expenses related
to the previously announced exit from the Hardin, MT facility,
partially offset by a gain on sale of equipment.
The decrease in bitcoin’s price had a significant impact on the
Company’s carrying value of digital currencies. On a combined
basis, digital currencies subject to impairment and digital
currencies held in the investment fund resulted in an expense of
$207.3 million in the current-year quarter compared with a combined
expense of $125.8 million in the prior-year period, an unfavorable
$81.5 million period-over-period variance.
The Company recorded revenues of $24.9 million during the three
months ended June 30, 2022 compared with $29.3 million during the
three months ended June 30, 2021. This $4.4 million decrease in
revenue was driven by lower revenue per bitcoin mined partially
offset by an 8% increase in bitcoin production activity.
Cost of revenues were significantly impacted by the acceleration
of certain costs associated with the early exit from the Hardin
facility. Cost of revenues - energy, hosting, and other costs
during the three months ended June 30, 2022, amounted to $16.7
million compared with $4.1 million in the prior-year period. This
$12.6 million increase was driven by accelerated cost recognition
associated with the early exit from Hardin and, to a lesser extent,
higher costs per bitcoin mined. Cost of revenues - depreciation and
amortization increased to $24.7 million from $2.9 million in the
prior-year quarter, primarily due to the acceleration of
depreciation related to the Company’s exit from the Hardin, MT
facility and, to a lesser extent, increased depreciation costs
associated with a higher number of mining servers in operation.
The Company also realized a gain of $58.2 million during the
quarter related to a 2021 contract that called for the company to
sell certain equipment in support of the development of commercial
activities at the wind farm in McCamey, TX.
General and administrative expenses were $12.6 million for the
three months ended June 30, 2022, an increase of $5.8 million from
the prior-year period. The increase was primarily a result of
higher stock-based (non-cash) compensation expense, which increased
to $6.1 million from $0.9 million in the prior-year period.
As of June 30, 2022, unrestricted cash on hand was $86.5
million.
Second Quarter 2022 Highlights
- Produced 707 bitcoin, an 8% increase from 655 bitcoin in the
second quarter of 2021 and a 44% sequential decrease from 1,259
bitcoin in the prior quarter due to prolonged energization delays
in Texas as well as maintenance and weather-related issues that
impacted the power generating facility in Montana
- Increased total Bitcoin holdings to
10,055 BTC as of June 30, 2022, which are now held directly after
the Company unwound its investment in NYDIG Digital Assets Fund
III, LP (“the Investment Fund”)
July 2022 and Recent Highlights
- Energization of previously installed miners hosted with Compute
North in West Texas commenced after the power provider received
confirmation of the tax-exempt status of the wind farm that
supplies energy to the 280-megawatt bitcoin mining facility
- Total number of miners installed and awaiting energization
across all facilities increased to approximately 49,000 miners (c.
4.7 EH/s) as of July 31, 2022
- Year-to-date through July 31, 2022, produced 2,038 bitcoin, a
58% increase over the same time period in the prior year
- In July, secured adequate hosting capacity to support all 23.3
EH/s of bitcoin mining after procuring new arrangements with
Applied Blockchain (NASDAQ: APLD) and other providers as well as
expanding arrangements with Compute North
- Benefitted from a downward market price adjustment for the
13,000 S19 XPs set to ship in August; benefits from price
adjustments expected to continue as remaining XPs are shipped in
the September – December timeframe
- Total bitcoin holdings increased to 10,127 BTC with a fair
market value of $236.3 million as of July 31, 2022
- In July, increased credit facilities by $100 million through
the refinancing an existing $100 million revolving line of credit
and adding an additional $100 million term loan with Silvergate
Bank
- Unrestricted cash on hand increased to approximately $120.7
million
Miner Energization and Installations UpdatesIn
July 2022, the Federal Energy Regulatory Commission (“FERC”) issued
an order confirming the exempt status of the wind farm where over
68,000 of Marathon’s miners, representing 6.8 EH/s, are being
installed and hosted by Compute North in West Texas. With the
exempt status confirmed, this facility, along with the miners
Compute North and Marathon proactively installed, are now being
energized. Currently, approximately 40,000 miners, representing 3.9
EH/s, are already installed at this facility. Based on the latest
construction schedules, this facility is expected to be complete
with all of Marathon’s miners installed in September.
As announced on July 18, 2022, Marathon believes it has now
secured ample hosting capacity to support the Company’s prior
target of 23.3 EH/s. The Company entered into an agreement with
Applied Blockchain to secure approximately 200 megawatts of hosting
capacity across Texas and North Dakota, with an option to expand to
270 megawatts; expanded its hosting arrangements with Compute North
to include an additional 42 megawatts of hosting capacity at
Compute North’s facility near Granbury, Texas; and secured an
additional 12 megawatts of hosting capacity with a variety of other
providers.
Based on current construction and installation schedules
provided to the Company by its hosting providers, Marathon
currently expects to have enough miners installed to generate 23.3
EH/s in the middle of fiscal year 2023. Additionally, the Company
continues to expect its mining operations to be 100% carbon neutral
by the end of 2022.
Mining Fleet Update
In April, Marathon announced its intention to
transition out of the facility in Hardin, Montana. On July 28, 2022
the Company terminated its power purchase agreements and commenced
the acceleration of its exit from Hardin. The bitcoin mining
servers that are on site are in the process of being inventoried
and removed from the facility and will be sold or redeployed to
other locations in the near future.
On April 11, 2022, Marathon purchased an additional 30,000 S19
XPs from BITMAIN. The Company currently intends to use these
additional S19 XPs, which are approximately 30% more energy
efficient than the S19 machines used in Montana, to upgrade its
current fleet. The Company still believes it is well positioned to
achieve its prior target of installing enough miners to generate
23.3 EH/s. However, of the 23.3. EH/s, approximately 66% is now
expected to be generated by S19 XPs.
Bitcoin Production Update as of July 31,
2022Year-to-date through July 31, 2022, Marathon’s mining
fleet has produced 2,038 bitcoin, a 58% increase over the same time
period in the prior year. As of July 31, 2022, Marathon held
approximately 10,127 BTC, the fair market of which was
approximately $236.3 million. As production ramps in the near
future, Marathon may sell a portion of its monthly bitcoin
production as needed to fund monthly operating costs.
Earnings Webcast and Conference CallMarathon
Digital Holdings will hold a webcast and conference call today at
4:30 p.m. Eastern time to discuss these results. To register to
participate in the conference call, or to listen to the live audio
webcast, please use this link. The webcast will also be broadcast
live and available for replay via the investor relations section of
the Company’s website at ir.marathondh.com.
Date: Today, August 8, 2022Time: 4:30 p.m. Eastern time (1:30
p.m. Pacific time)Registration link: LINK
If you have any difficulty connecting with the conference call,
please contact Marathon’s investor relations team at
ir@marathondh.com.
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, 2021, filed with the
SEC on March 10, 2022. 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 August 2022.
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 mines bitcoin with a
focus on the blockchain ecosystem and the generation of digital
assets.
Marathon Digital
Holdings Company Contact: Telephone:
800-804-1690Email: ir@marathondh.com
MARATHON DIGITAL HOLDINGS, INC. AND
SUBSIDIARIESCONSOLIDATED CONDENSED STATEMENTS OF
OPERATIONS (Unaudited)
|
|
Three month period ended June 30, |
|
Year to date period ended June 30, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenues |
$ |
24,921,816 |
|
|
$ |
29,321,857 |
|
|
$ |
76,639,534 |
|
|
$ |
38,474,672 |
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
Cost of revenues: |
|
|
|
|
|
|
|
|
Energy, hosting and other costs |
|
(16,684,759 |
) |
|
|
(4,056,168 |
) |
|
|
(29,201,710 |
) |
|
|
(5,724,646 |
) |
|
Depreciation and amortization |
|
(24,709,797 |
) |
|
|
(2,937,666 |
) |
|
|
(38,586,480 |
) |
|
|
(3,675,603 |
) |
|
|
|
(41,394,555 |
) |
|
|
(6,993,834 |
) |
|
|
(67,788,191 |
) |
|
|
(9,400,249 |
) |
|
Operating and administrative
expenses: |
|
|
|
|
|
|
|
|
General and administrative expenses |
|
(12,641,332 |
) |
|
|
(6,831,039 |
) |
|
|
(26,835,089 |
) |
|
|
(60,175,421 |
) |
|
Impairment of digital currencies |
|
(127,590,231 |
) |
|
|
(11,078,660 |
) |
|
|
(147,141,486 |
) |
|
|
(11,740,859 |
) |
|
Impairment of patents |
|
- |
|
|
|
- |
|
|
|
(919,363 |
) |
|
|
- |
|
|
|
|
(140,231,563 |
) |
|
|
(17,909,699 |
) |
|
|
(174,895,938 |
) |
|
|
(71,916,280 |
) |
Other operating
income (expense): |
|
|
|
|
|
|
|
|
Change in fair value of
digital currencies held in fund |
|
(79,688,590 |
) |
|
|
(114,704,596 |
) |
|
|
(85,016,208 |
) |
|
|
17,323,121 |
|
|
Gain on sale of equipment |
|
58,181,516 |
|
|
|
- |
|
|
|
58,181,516 |
|
|
|
- |
|
|
|
|
(21,507,074 |
) |
|
|
(114,704,596 |
) |
|
|
(26,834,692 |
) |
|
|
17,323,121 |
|
Operating
loss |
|
(178,211,376 |
) |
|
|
(110,286,272 |
) |
|
|
(192,879,286 |
) |
|
|
(25,518,736 |
) |
Non-operating
income (expense) |
|
165,280 |
|
|
|
1,400,872 |
|
|
|
393,973 |
|
|
|
(7,250 |
) |
Interest
expense |
|
(3,748,322 |
) |
|
|
(1,203 |
) |
|
|
(6,562,358 |
) |
|
|
(2,406 |
) |
Loss before income
taxes |
|
(181,794,418 |
) |
|
|
(108,886,603 |
) |
|
|
(199,047,671 |
) |
|
|
(25,528,391 |
) |
Income tax
(expense) benefit |
|
(9,852,224 |
) |
|
|
1,984 |
|
|
|
(5,557,560 |
) |
|
|
514 |
|
Net loss |
$ |
(191,646,642 |
) |
|
$ |
(108,884,619 |
) |
|
$ |
(204,605,231 |
) |
|
$ |
(25,527,878 |
) |
|
|
|
|
|
|
|
|
|
Net loss per
share, basic and diluted |
$ |
(1.75 |
) |
|
$ |
(1.09 |
) |
|
$ |
(1.93 |
) |
|
$ |
(0.26 |
) |
Weighted average
shares outstanding, basic and diluted |
|
109,437,293 |
|
|
|
99,466,946 |
|
|
|
106,101,762 |
|
|
|
96,922,964 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Information: |
Three month period ended June 30, |
|
Year to date period ended June 30, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Total margin
(1) |
$ |
8,237,057 |
|
|
$ |
25,265,689 |
|
|
$ |
47,437,824 |
|
|
$ |
32,750,026 |
|
bitcoin ("BTC")
production during the period, in BTC |
|
707.1 |
|
|
|
654.4 |
|
|
|
1,965.6 |
|
|
|
846.2 |
|
Adjusted
EBITDA |
|
|
|
|
|
|
|
Net loss |
$ |
(191,646,642 |
) |
|
$ |
(108,884,619 |
) |
|
$ |
(204,605,231 |
) |
|
$ |
(25,527,878 |
) |
|
Exclude: Interest expense |
|
3,748,322 |
|
|
|
1,203 |
|
|
|
6,562,358 |
|
|
|
2,406 |
|
|
Exclude: Income tax expense
(benefit) |
|
9,852,224 |
|
|
|
(1,984 |
) |
|
|
5,557,560 |
|
|
|
(514 |
) |
EBIT |
|
|
(178,046,096 |
) |
|
|
(108,885,400 |
) |
|
|
(192,485,313 |
) |
|
|
(25,525,985 |
) |
|
Exclude: Depreciation and
Amortization |
|
24,709,797 |
|
|
|
2,937,666 |
|
|
|
38,586,480 |
|
|
|
3,675,603 |
|
EBITDA |
|
(153,336,300 |
) |
|
|
(105,947,734 |
) |
|
|
(153,898,833 |
) |
|
|
(21,850,383 |
) |
Adjustments for
non-cash and non-recurring items: |
|
|
|
|
|
|
|
|
Stock compensation expense,
net of withholding tax |
|
6,132,224 |
|
|
|
875,971 |
|
|
|
15,407,576 |
|
|
|
51,907,111 |
|
|
Impairment of patents |
|
- |
|
|
|
- |
|
|
|
919,363 |
|
|
|
- |
|
Adjusted
EBITDA |
$ |
(147,204,076 |
) |
|
$ |
(105,071,763 |
) |
|
$ |
(137,571,894 |
) |
|
$ |
30,056,728 |
|
|
|
|
|
|
|
|
|
|
Changes in
carrying value of digital assets: |
|
|
|
|
|
|
|
|
Change in fair value of
investment fund |
$ |
(79,688,590 |
) |
|
$ |
(114,704,596 |
) |
|
$ |
(85,016,208 |
) |
|
$ |
17,323,121 |
|
|
Impairment of digital
currencies |
|
(127,590,231 |
) |
|
|
(11,078,660 |
) |
|
|
(147,141,486 |
) |
|
|
(11,740,859 |
) |
|
|
$ |
(207,278,821 |
) |
|
$ |
(125,783,256 |
) |
|
$ |
(232,157,694 |
) |
|
$ |
5,582,262 |
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, |
|
|
|
|
BTC held
at end of period: |
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
Total BTC held |
|
10,054.8 |
|
|
|
5,783.7 |
|
|
|
|
|
|
BTC utilized as collateral for
borrowings |
|
2,820.4 |
|
|
|
- |
|
|
|
|
|
|
Market value of 1 BTC (in
USD) |
$ |
19,785 |
|
|
$ |
35,041 |
|
|
|
|
|
|
FMV of BTC held |
$ |
198,931,636 |
|
|
$ |
202,665,625 |
|
|
|
|
|
|
Carrying value of all BTC
held |
$ |
190,438,773 |
|
|
$ |
195,881,475 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Total margin
is defined as Revenues less Cost of revenues - energy, hosting,
other |
|
|
|
|
Non-GAAP Financial Measures
We provide investors with a reconciliation from
net income to the non-GAAP measure known as Adjusted EBITDA as a
component of this earnings release. For each period in question, we
define “Adjusted EBITDA” as (a) GAAP net income (or loss) plus (b)
adjustments to add back the impacts of (1) depreciation and
amortization, (2) interest expense, (3) income tax expense and (4)
adjustments for non-cash and non-recurring items (which currently
include (i) stock compensation expense, (ii) net of withholding
taxes and (iii) impairments of patents (if any).
Adjusted EBITDA is not a measurement of financial performance
under GAAP and, as a result, this measure may not be comparable to
similarly titled measures of other companies. Non-GAAP financial
measures are subject to material limitations as they are not in
accordance with, or a substitute for, measurements prepared in
accordance with GAAP. Adjusted EBITDA is not meant to be considered
in isolation and should be read only in conjunction with our
Quarterly Reports on Form 10-Q and our Annual Reports on Form 10-K
as filed with the Securities and Exchange Commission. Management
uses both Adjusted EBITDA and the supplemental information provided
herein as a means of understanding, managing and evaluating
business performance and to help inform operating decision making.
We rely primarily on our Consolidated Condensed Financial
Statements to understand, manage, and evaluate our financial
performance and use the non-GAAP financial measures only
supplementally.
Marathon Digital (NASDAQ:MARA)
Gráfico Histórico do Ativo
De Mar 2024 até Abr 2024
Marathon Digital (NASDAQ:MARA)
Gráfico Histórico do Ativo
De Abr 2023 até Abr 2024