Marathon Digital (MARA) recently faced a setback as its second-quarter revenue fell short of Wall Street’s forecasts, leading to an 8% drop in its shares during after-hours trading. The company reported a revenue of $145.1 million, which was approximately 9% lower than the expected $157.9 million. The CEO, Fred Thiel, attributed this miss to various operational challenges, including unexpected equipment failures, maintenance issues at the Ellendale site, increased global hash rate, and the impact of the recent halving event on the mining sector.
Despite the revenue miss, Marathon achieved a record mining power of 31.5 exahash per second (EH/s) in the quarter. The company has set a target of reaching a hashrate of 50 EH/s by the end of the year, with further expansion plans for 2025. However, the adjusted EBITDA dropped to a loss of $85.1 million from a gain of $35.8 million in the previous year. This decrease was primarily due to unfavorable fair value adjustments of digital assets and reduced BTC production. To combat financial pressures, Marathon sold 51% of the BTC it mined to cover operating costs.
In response to the financial challenges, Marathon purchased $100 million worth of bitcoin, choosing to retain all of it on its balance sheet, which now exceeds 20,000 BTC. The company also restructured internally to better align with growth opportunities and enhance operational efficiency. However, Marathon Digital recently faced legal trouble, being fined $138 million for breaching a non-disclosure agreement.
In contrast to Marathon Digital, rival crypto miner Riot Platforms reported revenue of $70 million for Q2 2024, marking an 8.8% decrease year-over-year. The performance of Riot Platforms was notably closer to Wall Street’s estimates, with the reported revenue just 0.63% below Zacks’ prediction. Interestingly, MARA’s stock fell 7.78% following the revenue report, closing at $18.14 according to Google Finance data.
Marathon Digital’s second-quarter revenue report reflects a mix of achievements and challenges. While the company has made significant progress in mining power, it has also faced financial losses and operational hurdles. The strategic moves to purchase bitcoin and restructure internally show a commitment to overcoming obstacles and pursuing growth opportunities. However, legal troubles and fluctuations in stock performance indicate a volatile landscape for crypto miners in the current market.
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