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Marathon Digital Holdings Announces Bitcoin Production and Mining Operation Updates for March 2024

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Marathon Digital Holdings, Inc. (MARA) increases BTC holdings to 17,381 BTC with total cash and BTC of $1.6B as of March 31, 2024. The company faced operational challenges impacting Bitcoin production but managed to increase hash rate by 4% in March. Marathon is focusing on optimizing performance at various sites and plans to expand its mining portfolio.
Positive
  • Marathon Digital Holdings, Inc. (MARA) holds 17,381 BTC with total cash and BTC of $1.6B as of March 31, 2024.
  • Bitcoin production faced challenges due to equipment failures and maintenance issues, leading to higher than anticipated curtailment at various sites.
  • Despite challenges, Marathon increased its average operational hash rate by 4% in March to 18.3 EH/s.
  • The company is relocating miners to optimize performance and preparing to transition to immersion at certain sites.
  • Marathon intends to expand its Bitcoin mining portfolio to approximately 1.1 gigawatts of capacity across 11 sites on three continents.
  • Financially, Marathon held $324.3 million in cash and cash equivalents with a combined balance of $1.6 billion in cash and BTC holdings.
  • The company aims to build liquidity on the balance sheet for strategic opportunities, including industry consolidation.
  • Marathon has upcoming conference participation and recent announcements related to acquisitions and technology innovations.
Negative
  • The company faced unexpected equipment failures and maintenance issues impacting Bitcoin production.
  • Higher than anticipated curtailment at various sites affected operational efficiency.
  • Transformer issues at sites like Granbury, McCamey, and Ellendale reduced capacity below historical norms.
  • Quality issues with transformers sourced at the Ellendale site led to challenges in re-energizing the site.
  • Marathon opted to sell 440 bitcoin in March and plans to sell a portion of its holdings in future periods.
  • Transaction fees as a percentage of total declined by 11% in March.
  • Financially, the total cash, cash equivalents, and restricted cash decreased by 24% from the prior month.
  • The company continues to face risks and uncertainties that investors should carefully consider before making investment decisions.

The reported increase in Marathon Digital Holdings' BTC holdings and cash reserves to a combined total of $1.6 billion is a significant indicator of the company's liquidity and potential investment in growth. The sale of 440 BTC in March suggests a strategic approach to treasury management, balancing the retention of a substantial cryptocurrency portfolio with the need for operational cash flow. This balance is critical for investors as it implies Marathon's ability to fund operations while maintaining a stake in the potential upside of BTC prices.

Furthermore, the 4% month-over-month increase in average operational hash rate and the 7% increase in BTC production reflect positively on the company's operational efficiency and resilience in the face of reported equipment and transformer issues. The company's efforts to optimize performance through strategic acquisitions and technology innovations, such as the two-phase immersion cooling system, may enhance long-term productivity and cost-efficiency, potentially leading to improved margins.

Marathon's expansion to approximately 1.1 gigawatts of capacity across multiple sites underscores the company's aggressive growth strategy within the Bitcoin mining industry. The diversification of operations across three continents could mitigate geographical risks and provide stability against local regulatory changes or energy supply fluctuations. The year-over-year improvements in Bitcoin produced, share of available miner rewards and number of blocks won are indicative of Marathon's growing market share and competitive positioning.

However, investors should be aware of the inherent volatility of the cryptocurrency market and regulatory uncertainties. While Marathon's current performance metrics are strong, the future landscape of Bitcoin mining could be affected by changes in energy costs, Bitcoin network difficulty adjustments and potential regulatory interventions. These factors could impact Marathon's operational costs and the valuation of its BTC holdings, thereby influencing its stock performance.

The operational challenges faced by Marathon, such as equipment failures and transformer issues, highlight the importance of infrastructure reliability in the energy-intensive Bitcoin mining sector. Marathon's proactive measures to address these issues and optimize site performance are important for maintaining operational continuity. The company's investment in technology, like immersion cooling, may lead to more efficient energy use, which is particularly relevant given the industry's scrutiny over environmental concerns.

Marathon's strategic acquisition of a data center adjacent to a wind farm signifies a commitment to sustainable energy sourcing, which could improve the company's public image and align with investor interest in environmentally responsible operations. The long-term benefits of such investments could include reduced energy costs and a lower carbon footprint, potentially contributing to a more favorable regulatory environment and enhanced investor sentiment.

- Increased BTC Holdings to 17,381 BTC; Total Cash and BTC of $1.6B as of March 31, 2024

- Average Operational Hash Rate Increases 4% M/M to 18.3 EH/s

Fort Lauderdale, FL, April 04, 2024 (GLOBE NEWSWIRE) -- Marathon Digital Holdings, Inc. (NASDAQ: MARA) ("Marathon" or "Company"), one of the world’s largest publicly traded Bitcoin miners and a leader in supporting and securing the Bitcoin ecosystem, today published unaudited bitcoin (“BTC”) production and miner installation updates for March 2024.

Management Commentary
"Throughout the first quarter, our Bitcoin production has been impacted by unexpected equipment failures, transmission line maintenance, and higher than anticipated weather-related curtailment across multiple sites," said Fred Thiel, Marathon's chairman and CEO. "After maintenance issues at Garden City were addressed, the site experienced higher than anticipated curtailment in March. At Granbury, McCamey, and Ellendale, we are continuing to work through transformer issues that have reduced capacity at those sites below historical norms.

"While the site in Ellendale was briefly recovered and re-energized at the end of February, it had to be brought back down due to the persistence of quality issues with the transformers sourced at the site. The demonstrated complexity of re-energizing Ellendale, along with the latest information and recent progress, indicates that capacity at this site is likely to be gradually increased over the coming months. Applied Digital is using its best commercially reasonable efforts to shorten and pull up the energization timeline.

"While our hosting provider continues to swap in newly acquired transformers and bring capacity at Ellendale back online, we have continued to focus on optimizing our performance at other sites. In March, we began relocating miners from Ellendale to take advantage of the additional capacity we recently acquired through our strategic acquisitions of sites in Texas and Nebraska. We are also preparing to transition part of Granbury to immersion to optimize performance. Despite the challenges, we increased our average operational hash rate by 4% in March to 18.3 exahash, and we increased our bitcoin production 7% to 894 bitcoin. We now have 17,381 BTC on our balance sheet, and our combined cash and bitcoin holdings are approximately $1.6 billion.

"As Ellendale is gradually brought back online, we intend to further develop our Bitcoin mining portfolio, which is growing to approximately 1.1 gigawatts of capacity diversified across 11 sites on three continents, and leveraging our recently announced technology innovations, like our two-phase immersion cooling system, to optimize performance and expand our position as a leader in converting energy into economic value."

Operational Highlights and Updates
Figure 1: Operational Highlights

  Year-Over-Year Comparison  Prior Month Comparison 
Metric 3/31/2024  3/31/2023  % Δ  3/31/2024  2/29/2024  % Δ 
Bitcoin Produced  894   825   8%  894   833   7%
Average Bitcoin Produced per Day  28.8   26.6   8%  28.8   28.7   %
Share of available miner rewards 1  3.0%  2.7%  9%  3.0%  3.0%  %
Transaction Fees as % of Total 5  4.5%  3.1%  47%  4.5%  5.1%  (11)%
Number of Blocks Won 5  118   81   46%  118   110   7%
Energized Hash Rate (EH/s) 2  27.8   11.5   142%  27.8   28.7   (3)%
 Average Operational Hash Rate (EH/s) 3  18.3   11.5   59%  18.3   17.6   4%
Installed Hash Rate (EH/s) 4  27.8   15.4   81%  27.8   28.7   (3)%

  1. Defined as the total amount of block rewards including transaction fees that Marathon earned during the period divided by the total amount of block rewards and transaction fees awarded by the Bitcoin network during the period.
  2. Defined as the amount of hash rate that could theoretically be generated if all miners that have been energized are currently in operation including miners that may be temporarily offline. Hash rates are estimates based on the manufacturers' specifications. All figures are rounded.
  3. Defined as the average hash rate that was actually generated during the month from all operational miners. All figures are estimates and are rounded.
  4. Defined as the sum of energized hash rate (see above) and hash rate that has been installed but not yet energized. Hash rates are estimates based on the manufacturers' specifications. All figures are rounded.
  5. These metrics are MaraPool only, do not include the joint ventures.

In March, Marathon energized approximately 4,000 additional miners (c. 0.4 EH/s). Once the current transition of 9,500 miners from Ellendale to Garden City is complete, Marathon's operating fleet will increase to approximately 235,000 Bitcoin miners, theoretically capable of producing 29.8 EH/s. Hash rate figures are calculated according to the manufacturers' specifications.

Figure 2: Operational Details by Site

Hash Rates in EH/s Installed Hash Rate  Energized Hash Rate  Avg Operating Hash Rate  Avg % of Energized 
Site State  Host Mar 2024  Feb 2024  Mar 2024  Feb 2024  Mar 2024  Feb 2024  Mar 2024  Feb 2024 
Owned Operated                               
Granbury  TX  Marathon  4.2   4.2   4.2   4.2   3.2   3.4   77%  82%
Garden City  TX  Marathon  4.5   4.5   4.5   4.5   3.5   2.6   78%  57%
Kearney  NE  Marathon  1.2   0.8   1.2   0.8   0.8   0.5   67%  63%
Total owned operated 9.9   9.5   9.9   9.5   7.5   6.5   76%  68%
Third-party Hosted                                   
McCamey  TX  US Bitcoin  7.7   7.7   7.7   7.7   6.4   6.0   83%  78%
Ellendale  ND  Applied  6.5   7.8   6.5   7.8   0.9   1.8   14%  23%
Jamestown  ND  Applied  1.4   1.4   1.4   1.4   1.4   1.4   98%  97%
All Other     Various  2.3   2.3   2.3   2.3   2.0   1.9   88%  84%
Total third-party hosted 17.9   19.2   17.9   19.2   10.7   11.1   60%  58%
Total        27.8   28.7   27.8   28.7   18.2   17.6   65%  61%


As of March 31, 2024 the Company holds a total of 17,381 unrestricted BTC. Marathon opted to sell 440 bitcoin in March. The Company still intends to sell a portion of its bitcoin holdings in future periods to support monthly operations, manage its treasury, and for general corporate purposes.

Financial Highlights and Updates
Figure 3: Financial Highlights

  Year-Over-Year Comparison  Prior Month Comparison 
Metric 3/31/2024  3/31/2023  % Δ  3/31/2024  2/29/2024  % Δ 
Total Cash, Cash Equivalents & Restricted Cash ($, in millions) $324.3  $124.9   160% $324.3  $425.6   (24)%
Unrestricted Cash  324.3   124.9   160%  324.3   425.6   (24)%
Restricted Cash        NA         NA 
Total BTC Holdings (in whole numbers)  17,381   11,466   52%  17,381   16,930   3%
Unrestricted BTC Holdings  17,381   11,466   52%  17,381   16,930   3%
Restricted BTC Holdings        NA         NA 
Pledged BTC Holdings        NA         NA 


Marathon held $324.3 million in cash and cash equivalents on its balance sheet at month end, all of which was unrestricted. During March, the combined balance of unrestricted cash and cash equivalents and bitcoin increased from $1,461.4 million to $1,563.4 million at March 31, 2024. In anticipation of the next Bitcoin network halving, the Company continues to build liquidity on the balance sheet to capitalize on strategic opportunities, including industry consolidation.

Upcoming Conferences
Bitcoin Policy Summit
April 9, 2024
Washington D.C.

Blockchain Life 2024
April 15-16, 2024
Dubai, UAE

AmCham Business Summit
April 24-25, 2024
Nairobi, Kenya

AIM Summit London
April 29-30, 2024
London, UK

Recent Announcements

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, 2023, filed with the SEC on February 28, 2024. 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. See "Forward-Looking Statements" below.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements in this press release relate to the expected timing and achievement of our growth targets, specifically relating to our anticipated hash rate and exahash growth. You can identify forward-looking statements by the use of words such as “may,” “will,” “could,” “anticipate,” “expect,” “intend,” “believe,” “continue,” or the negative of such terms, or other comparable terminology. Forward-looking statements include the assumptions underlying or relating to such statements. The Company has based these forward-looking statements largely on its current expectations and projections about future events and trends that we believe may affect its business, results of operations and financial condition. The outcomes of the events described in these forward-looking statements are subject to risks, uncertainties and other factors described under the heading “Risk Factors” in the reports the Company files with the Securities and Exchange Commission. The Company cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results could differ materially from those expressed or implied in the forward-looking statements. The forward-looking statements made in this press release relate only to events as of the date of this press release. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made.

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.

For more information, visit www.mara.com, or follow us on:

Twitter: @MarathonDH
LinkedIn: www.linkedin.com/company/marathon-digital-holdings
Facebook: www.facebook.com/MarathonDigitalHoldings
Instagram: @marathondigitalholdings

Marathon Digital HoldingsCompanyContact:
Telephone: 800-804-1690
Email: ir@mara.com

Marathon Digital Holdings Media Contact:
Email: marathon@wachsman.com


FAQ

How many BTC does Marathon Digital Holdings, Inc. (MARA) hold as of March 31, 2024?

Marathon holds 17,381 BTC as of March 31, 2024.

What was the total cash and BTC of Marathon Digital Holdings, Inc. (MARA) as of March 31, 2024?

Marathon had total cash and BTC of $1.6 billion as of March 31, 2024.

What challenges did Marathon face in Bitcoin production in March 2024?

Marathon faced challenges such as unexpected equipment failures, maintenance issues, and higher than anticipated curtailment at various sites in March 2024.

How much did Marathon increase its average operational hash rate by in March 2024?

Marathon increased its average operational hash rate by 4% in March 2024.

What is Marathon's plan regarding its Bitcoin mining portfolio expansion?

Marathon intends to expand its Bitcoin mining portfolio to approximately 1.1 gigawatts of capacity across 11 sites on three continents.

What financial highlights were reported by Marathon Digital Holdings, Inc. (MARA) for March 31, 2024?

Marathon reported $324.3 million in cash and cash equivalents with a combined balance of $1.6 billion in cash and BTC holdings as of March 31, 2024.

What risks should investors consider before investing in Marathon Digital Holdings, Inc. (MARA)?

Investing in Marathon's securities involves a high degree of risk, and investors should carefully consider the risks, uncertainties, and challenges before making investment decisions.

Marathon Digital Holdings, Inc.

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About MARA

Marathon Digital Holdings is focused on securing and supporting the development of the Bitcoin ecosystem by building one of the largest, most agile, and most sustainable bitcoin mining operations in the world. We’re here to help make Bitcoin more secure and more widely adopted by bringing a professional and innovative approach to securing the blockchain.