Key Points
- Marathon Digital, a Bitcoin mining company, sold over 50% of the BTC mined in Q2 to cover operating costs.
- The company’s shares fell over 7% after its Q2 earnings report showed revenue significantly below expectations.
Marathon Digital, a US-based cryptocurrency mining company, has revealed in its second quarter financial report that it had to sell more than half of the Bitcoin it mined during that period to cover operating costs.
Following the release of its earnings report, the company’s shares fell by more than 7% on Thursday, August 1. The report demonstrated that the company’s revenue fell considerably short of what analysts had predicted.
Marathon’s Q2 Performance
According to the company’s report, Marathon produced a total of 2,058 Bitcoin (BTC) during the second quarter. This represents a 30% decrease compared to the same quarter in the previous year. The company explained that it had to sell 51% of the Bitcoin it mined during the reporting period to cover operating costs. This was necessary as the company’s net loss skyrocketed to nearly $200 million.
Despite a nearly 80% increase in quarterly revenues to $145.1 million, Marathon’s performance did not meet analysts’ forecasts of approximately $158 million. This shortfall marks the second consecutive quarter that the company has missed revenue projections, following a 15% revenue underperformance in Q1 compared to estimates by Zacks Investment Research.
Addressing the Challenges
Marathon’s CEO, Fred Thiel, acknowledged the challenges the company faced. These included unexpected equipment failures, transmission line maintenance, increased global hash rate, and the April halving event.
Thiel reassured investors that the transformer issues at the Ellendale site were resolved after the quarter ended. He also confirmed that Marathon aims to achieve “50 exahash of energized hash rate by the end of 2024 with additional growth in 2025.”
In late July, Marathon announced a $100 million Bitcoin acquisition as part of its “HODL strategy,” bringing its total holdings to over 20,000 BTC. The company also stated that it will now keep all Bitcoin mined and occasionally make strategic open market purchases as part of its revised strategy.
