Marathon Digital (MARA) recently reported a second-quarter revenue of $145.1 million, falling short of Wall Street’s forecast by approximately 9%. The company attributed this revenue miss to operational challenges such as 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. These issues had a negative impact on the company’s BTC production.
Despite the setbacks in revenue, 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 plans further expansion in 2025 to overcome the current challenges. CEO Fred Thiel mentioned that the company has restructured internally to better align with growth opportunities and enhance operational efficiency.
Marathon’s adjusted EBITDA dropped to a loss of $85.1 million from a gain of $35.8 million in the previous year, mainly 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 and purchased $100 million worth of bitcoin to retain on its balance sheet, now totaling over 20,000 BTC. The average price of BTC mined in Q2 2024 was 136% higher than the previous year, but the daily average of mined BTC decreased by 9.3 compared to the previous period.
Marathon Digital faced legal trouble recently, resulting in a $138 million fine for breaching a non-disclosure agreement. Meanwhile, rival crypto miner Riot Platforms reported revenue of $70 million for Q2 2024, marking an 8.8% year-over-year decrease. However, Riot was closer to Wall Street’s estimates, with reported revenue just 0.63% below Zacks’ prediction. MARA’s stock fell by 7.78% to $18.14 at the end of the trading day.
Marathon Digital’s challenges in Q2 reflect the volatile nature of the cryptocurrency mining industry. Despite the setbacks in revenue and EBITDA, the company is focused on increasing its hashrate and expanding operations to improve its financial position in the future. With strategic decisions like retaining bitcoin on its balance sheet and internal restructuring, Marathon aims to overcome the obstacles it faced in the previous quarter and regain investor confidence.
