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 December 2022.
Management Commentary“In 2022,
we made significant progress in increasing our hash rate while also
transitioning to more sustainable power sources,” said Fred Thiel,
Marathon’s Chairman and CEO. “Despite challenges earlier in the
year, we doubled our hash rate to 7.0 exahashes per second
year-over-year, with a majority of it now located at the King
Mountain wind farm in West Texas. We finished the year with one of
our most productive quarters to date, producing 1,562 bitcoin in
the fourth quarter.
“In December, we expanded our agreement with
Applied Digital to deploy roughly 12,000 S19 XPs, which are
approximately 30% more energy efficient than the prior generation
of servers, at their Jamestown facility in North Dakota. This site
is already constructed and operational, and our expectation is for
miners to come online within the next month. In Garden City,
installations of miners remain underway, as we now have roughly 2.1
exahashses installed and pending energization.
“We also took proactive measures to strengthen
our liquidity position and enhance the performance of our mining
fleet. Given the macroeconomic uncertainty heading into 2023, we
decided to fully pay down outstanding balances under our revolving
credit agreement. This freed up bitcoin that was previously held as
collateral, increasing our unrestricted bitcoin holdings from 4,200
BTC as of November 30 to 7,815 BTC (approximately $129.3 million)
as of December 31. We finished the year with $103.7 million in cash
on hand.
“During December, we tested overclocking and
underclocking servers and began researching dual-phase immersion
cooling systems. We also continued working with the new operator of
the King Mountain site on improving operations and the curtailment
strategy to optimize production. These efforts position us to
develop our competitive advantages further and become a more
efficient and resilient business as we continue to grow.
“As we enter 2023, we remain confident in our
ability to scale Marathon into one of the largest and most energy
efficient Bitcoin mining operations globally. We have thousands of
miners ready to be energized over the coming months, which we
expect to more than triple our current production capacity to
approximately 23 exahashes by mid-year.”
Recent Highlights
- Produced 475 BTC in December 2022
and 1,562 BTC in Q4 2022
- Produced 4,144 BTC in fiscal year
2022, a 30% increase from 3,197 BTC produced in fiscal year
2021
- As of January 1, operating mining
fleet consisted of approximately 69,000 active miners, capable of
producing approximately 7.0 EH/s
- 2.1 EH/s is currently pending
energization after 1,000 S19 XPs were installed in December
- Depending on Applied Digital’s
energization timeline, the Company expects to have between 12.0
EH/s and 15.0 EH/s online by March 31, 2023
- Reduced revolver borrowings from
$30 million as of November 30 to $0 as of December 31, 2022
- Unrestricted bitcoin holdings on
December 31, 2022 were approximately 7,815 BTC with a fair market
value of approximately $129.3 million
- Total bitcoin holdings increased to
12,232 BTC as of December 31, 2022
- Unrestricted
cash on hand was approximately $103.7 million at December 31,
2022
Technology UpdateIn November,
Marathon began an immersion-cooled pilot project, which involves
submerging Bitcoin mining servers in a dielectric fluid to
determine if the Company can improve the efficiency and/or
performance of its operations. In December, Marathon’s team
successfully increased the hash rate of an S19 J Pro by 20% while
reducing its power draw on a per terahash basis by approximately
4%. The Company also increased the hash rate of an S19 XP by 20%,
marginally increasing the number of joules per terahash from 21.5
to 23.7 joules per terahash.
Marathon is routinely looking for ways to stay
ahead of the technology curve, and our latest exploration is into
the potential benefits of dual-phase immersion. Our initial
findings suggest that this technology could reduce capital
expenditure on servers by approximately 10% versus traditional
air-cooled setups and almost 7% compared to single-phase immersion
systems. This is achieved by eliminating the need for aluminum
chassis, heat synchs, and other parts, which are no longer required
in dual-phase immersion cooling. In addition, energy consumption
may also be reduced by approximately 7% versus single-phase
immersion systems, as dual-phase immersion increases the heat
density by 2.5 times, enabling more servers to be racked closely
together.
While it remains to be seen if such improvements
in performance can be consistently replicated and implemented at
scale, the Company is encouraged by these preliminary results and
their ability to potentially increase Marathon’s competitive
advantages.
Miner Energization and Installations
UpdatesAccording to the latest information made publicly
available, construction of facilities and installation of miners at
Applied Digital’s data center sites remain underway as Applied
Digital awaits regulatory approval to energize its newest
facilities.
In December, Marathon secured an additional 33
megawatts of hosting capacity with Applied Digital at its
Jamestown, North Dakota facility. As a result of this new
arrangement the Company expects to deploy approximately 12,000 S19
XPs in the coming month as this site is fully constructed and has
the necessary requirements for energization.
As of December 31, Marathon’s operating fleet
consists of approximately 69,000 bitcoin servers, theoretically
capable of producing approximately 7.0 EH/s when operating at full
capacity. An additional 2.1 EH/s is currently pending energization
after an additional 1,000 S19 XPs were successfully installed in
Texas during the month of December.
Once all of Marathon’s previously purchased
miners are installed, approximately 66% of the Company’s hash rate
is expected to be generated by S19 XPs, which are approximately 30%
more energy efficient that the prior generation of mining servers.
The Company still expects to have approximately 23 EH/s of capacity
installed near the middle of 2023.
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 December
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 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, while remaining asset light.
Marathon Digital
Holdings Company Contact: Telephone:
800-804-1690Email: ir@mara.com
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/d244082a-110c-49d8-8840-4b6b20870fa1
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