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 January 2023.
Management Commentary“We
started the year by producing a record 687 bitcoin in January 2023,
which is a 45% increase from the 475 bitcoin we produced in
December 2022,” said Fred Thiel, Marathon’s chairman and CEO. “The
improvement in our bitcoin production was primarily a result of our
team’s ability to work in tandem with the new hosting provider in
McCamey, Texas, to address the maintenance and technical issues at
the King Mountain data center that had suppressed our bitcoin
production in the fourth quarter of 2022. We believe the
improvements in our operational efficiency, along with the
proactive measures we have taken to strengthen our balance sheet,
have placed Marathon in a strong position to achieve our growth and
operational targets in 2023.
“With bitcoin production increasing and becoming
more consistent, we made the strategic decision to sell some of our
bitcoin, as previously planned, to cover some of our operating
expenses and for general corporate purposes. We intend to continue
to sell a portion of our bitcoin holdings in 2023 to fund monthly
operating costs. Even with these sales, our unrestricted bitcoin
holdings increased from 7,815 bitcoin as of December 31, 2022, to
8,090 bitcoin as of January 31, 2023, as our production improved
and the appreciation in bitcoin’s price in January reduced the
amount of bitcoin we had posted as collateral. Additionally, we
ended the month with $133.8 million in unrestricted cash on
hand.
“As we look ahead, our focus for the year is to
energize more miners and to optimize their performance. We remain
confident in our ability to scale Marathon into one of the largest
and most energy efficient Bitcoin mining operations globally by
installing approximately 23 exahashes of computing power near the
middle of 2023.”
Operational Highlights and
Updates
Figure 1: Operational Highlights
Operational
Highlights |
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Year-Over-Year Comparison |
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Prior Month Comparison |
Metric |
1/31/2023 |
1/31/2022 |
% Δ |
|
1/31/2023 |
12/31/2022 |
% Δ |
BTC
Produced |
687 |
462 |
49% |
|
687 |
475 |
45% |
Avg.
BTC Produced per Day |
22.1 |
14.9 |
49% |
|
22.1 |
15.3 |
45% |
Operational/Energized Hash Rate
(EH/s)1 |
7.3 |
3.6 |
103% |
|
7.3 |
7.0 |
4% |
Installed Hash Rate (EH/s)2 |
11.0 |
3.6 |
206% |
|
11.0 |
9.1 |
21% |
1. Defined as the amount of hash rate that could theoretically be
generated if all mining servers that have been
operational/energized are currently in operation (includes mining
servers that are temporarily offline for maintenance or similar
reasons). Hash rates are estimates based on the manufacturers'
specifications. All figures are rounded. |
2. Defined as the sum
of operational/energized hash rate (see above) and hash rate that
has been installed but is not yet energized (e.g., mining servers
are in containers but not energized). Hash rates are estimates
based on the manufacturers' specifications. All figures are
rounded. |
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According to the latest information made
publicly available, energization of Applied Digital’s facilities in
Garden City, Texas, and Ellendale, North Dakota, are expected to
commence during the first quarter of 2023. In Garden City, TX,
approximately 26,700 of Marathon’s S19 XPs (c. 3.7 EH/s) have
already been installed.
In January, 2,100 of Marathon’s S19 XPs (c. 0.3
EH/s) were energized at the Jamestown facility. As a result, the
Company’s operating fleet increased to approximately 71,000 Bitcoin
servers, theoretically capable of producing approximately 7.3 EH/s
as of February 1, 2023, according to the manufacturer’s
specifications. The Company expects the full energization of the 33
megawatts contracted for at the Jamestown site to occur in the
first quarter of 2023, bringing an additional 8,900 S19 XPs (c. 1.2
EH/s) online.
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 than the prior generation of mining servers.
The Company still expects to have approximately 23 EH/s of capacity
installed near the middle of 2023.
Financial Highlights and
Updates
Figure 3: Financial Highlights
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Financial
Highlights |
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Year-Over-Year Comparison |
|
Prior Month Comparison |
Metric |
1/31/2023 |
1/31/2022 |
% Δ |
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1/31/2023 |
12/31/2022 |
% Δ |
Total Cash, Cash Equivalents, & Restricted Cash ($, in
millions) |
142.6 |
189.1 |
-25% |
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142.6 |
112.5 |
27% |
Unrestricted Cash |
133.8 |
189.1 |
-29% |
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133.8 |
103.7 |
29% |
Restricted Cash |
8.8 |
0.0 |
NA |
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8.8 |
8.8 |
0% |
Total BTC Holdings (in whole numbers) |
11,418 |
8,595 |
33% |
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11,418 |
12,232 |
-7% |
Unrestricted BTC Holdings |
8,090 |
8,595 |
-6% |
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8,090 |
7,815 |
4% |
Restricted BTC Holdings |
3,328 |
0 |
NA |
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3,328 |
4,417 |
-25% |
Note: All cash figures are presented in millions; all bitcoin
("BTC") figures are presented as whole numbers. |
In prior press releases and earnings calls,
Marathon has indicated that the Company intends to sell a portion
of its bitcoin holdings to cover operational expenses as production
begins to ramp. With production improving, Marathon opted to sell
1,500 BTC during January 2023. As a result, Marathon holds a total
of 11,418 BTC, of which approximately 8,090 BTC (c. $187.2 million)
are unrestricted, as of January 31, 2023. Marathon may continue to
sell a portion of its bitcoin holdings in future periods to support
monthly operations, manage its treasury, or for general corporate
purposes. The Company ended the month with $133.8 million in
unrestricted cash on hand.
Additional Operational
UpdatesOn January 27, 2023, Marathon Digital Holdings,
Inc. (the “Company”) and FS Innovation, LLC (“FSI”) entered into a
Shareholders’ Agreement (the “Agreement”) regarding the formation
of an Abu Dhabi Global Markets company (the “ADGM Entity”), whose
purpose shall be to jointly (a) establish and operate one or more
mining facilities for digital assets; and (b) mine digital assets
(collectively, the “Business”). The initial project by the ADGM
Entity shall consist of two digital asset mining sites comprising
250 MW in Abu Dhabi, and the initial equity ownership in the ADGM
Entity shall be 80% FSI and 20% the Company. For more information,
see the 8-K filed on January 27, 2023, which can be accessed at
Marathon’s investor relations website.
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 February
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, while remaining asset light.
Marathon Digital
Holdings Company Contact: Telephone:
800-804-1690Email: ir@mara.com
Marathon Digital (NASDAQ:MARA)
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