Marathon Digital (MARA) recently released its second-quarter revenue report, which failed to meet Wall Street’s expectations. The company reported revenue of $145.1 million, missing the forecast of $157.9 million by approximately 9%. This revenue miss was attributed to various operational challenges, including unexpected equipment failures, transmission line maintenance at its Ellendale site, an increased global hash rate, and the impact of the recent halving event on the mining sector. As a result, the CEO reported that these issues adversely affected the company’s BTC production.
Despite these setbacks, Marathon achieved a record mining power of 31.5 exahash per second (EH/s) in the quarter. The company aims to reach a hashrate of 50 EH/s by the end of the year and has plans for further expansion in 2025. However, the miner’s adjusted EBITDA dropped to a loss of $85.1 million from a $35.8 million gain in the previous year. This loss was primarily due to unfavorable fair value adjustments of its digital assets and reduced BTC production. To cover operating costs, Marathon sold 51% of the BTC it mined. However, the company has since purchased $100 million worth of bitcoin, choosing to retain all of it on its balance sheet, which now exceeds 20,000 BTC.
The report also highlighted that the average price of BTC mined in Q2 2024 was 136% higher than the previous year, despite a decrease in daily mining output. On average, Marathon mined 22.9 BTC per day, a decrease of 9.3 BTC per day compared to the prior period. The CEO acknowledged that the company has restructured internally to align with growth opportunities and enhance operational efficiency in response to these challenges.
Marathon Digital’s recent legal trouble, where they were fined $138 million for breaching a non-disclosure agreement, has added to the company’s financial pressures. Meanwhile, rival crypto miner Riot Platforms reported revenue of $70 million for Q2 2024, marking an 8.8% decrease year-over-year. However, Riot Platforms’ performance was notably closer to Wall Street’s estimates, with the reported revenue just 0.63% below Zacks’ prediction. Interestingly, MARA’s stock fell by 7.78% following the report, closing the trading day at $18.14.
Marathon Digital faces various challenges in its financial performance and operational efficiency, as highlighted by its second-quarter report. The company’s ability to address these issues, adapt to the changing market conditions, and execute its growth plans will be crucial in determining its future success in the competitive cryptocurrency mining industry.
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