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

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Marathon Digital Holdings reported a 22% increase in its average operational hash rate for May 2024, reaching 25.7 EH/s. The company produced 616 BTC, a decline of 27% from April, but increased its share of miner rewards to 4.2%. Marathon's total BTC holdings rose to 17,857, with a combined cash and BTC value of $1.5 billion. Operational improvements at the Ellendale facility and international agreements in Kenya were highlighted. Despite reduced BTC production, Marathon remains on track for a 50 EH/s target by year-end. Financially, the company saw a significant rise in cash and BTC holdings, with unrestricted cash at $290.4 million.

Positive
  • 22% increase in average operational hash rate to 25.7 EH/s.
  • Total BTC holdings increased to 17,857 BTC.
  • Combined cash and BTC value of $1.5 billion as of May 31, 2024.
  • Significant operational improvements at the Ellendale facility.
  • International agreement with the Ministry of Energy and Petroleum of the Republic of Kenya.
  • Unrestricted cash rose to $290.4 million, a 198% increase year-over-year.
Negative
  • 27% decline in BTC production from April to 616 BTC.
  • 51% year-over-year decrease in BTC produced, from 1,245 to 616.
  • Transaction fees as a percentage of total revenue declined from 16.2% in April to 6.6% in May.
  • Potential risk in relying on future BTC sales to support operations.

Marathon Digital Holdings' latest report for May 2024 shows a substantial increase in operational hash rate by 22% month-over-month, reaching 25.7 EH/s. This is significant in the cryptocurrency mining industry, as hash rate directly correlates with mining power and profitability. Additionally, the company’s cash and BTC holdings have increased notably to $1.5 billion from $1.2 billion the previous month. This indicates a robust financial position and a well-managed treasury strategy.

The company's average bitcoin production declined by 27% compared to April, primarily due to the April Halving event. However, Marathon managed to win more blocks, demonstrating operational efficiency. This resilience is important as it shows the company's adaptability to blockchain's evolving difficulty levels.

For retail investors, this report showcases strong operational metrics and a stable financial footing. It is worth noting that Marathon’s expansion and technological advancements, such as immersion cooling, could continue to improve efficiency and profitability. However, fluctuations in bitcoin prices and mining difficulty levels remain external risks.

Marathon's implementation of immersion cooling technology and the use of the latest generation hardware is noteworthy. Immersion cooling is a method where electronic components, including servers and miners, are submerged in a thermally, but not electrically, conductive liquid to improve cooling and enhance performance. This is particularly beneficial in high-density computing environments like bitcoin mining.

The increased efficiency from these technological improvements can result in significant cost savings and improved hash rates. The Ellendale facility's operational improvements and the optimization efforts at other recently acquired sites are integral to Marathon’s strategy to enhance their productivity. This technological edge could bolster Marathon’s competitive standing in the long term.

Retail investors should understand that while the initial investment in such technology can be high, the long-term benefits include reduced operational costs and better performance.

Marathon Digital's expansion into international markets, particularly their agreement with Kenya's Ministry of Energy and Petroleum, marks a strategic move towards global diversification. This aligns with their goal to have 50% of revenues coming from overseas by 2028. Such diversification can mitigate the risks associated with dependency on a single market and leverage opportunities in emerging markets.

Furthermore, the collaboration with sovereign wealth funds in the Middle East and the pilot project in Paraguay indicate a proactive approach to exploring new avenues and partnerships. These international ventures could not only contribute to revenue growth but also help in positioning Marathon as a global leader in digital asset compute supporting energy transformation.

For investors, this global expansion signifies potential revenue stability and growth. However, they should also be aware of the regulatory and operational challenges that can arise from entering new markets.

  • Average Operational Hash Rate Increases 22% M/M to 25.7 EH/s
  • Increased BTC Holdings to 17,857 BTC; Total Cash and BTC of $1.5 B as of May 31, 2024

Fort Lauderdale, FL, June 05, 2024 (GLOBE NEWSWIRE) -- Marathon Digital Holdings, Inc. (NASDAQ: MARA) ("Marathon" or the "Company"), a global leader in leveraging digital asset compute to support the energy transformation, today published unaudited bitcoin (“BTC”) production and miner installation updates for May 2024.

Management Commentary

"The strength of our MARA pool was evident in May as we achieved a noteworthy 32% increase in the number of blocks won compared to April, growing from 129 blocks to 170," said Fred Thiel, Marathon's chairman and CEO. "At the same time, our share of available miner awards grew from 3.2% to 4.2%. In May, we mitigated the impact of the April Halving event by increasing the number of blocks won, resulting in the production of 616 bitcoin, a decline of only 27%.

"Domestically, our Ellendale facility’s operational improvements are yielding positive results, and our team continues to optimize our recently acquired sites with immersion cooling technology and the latest generation hardware. With these advancements and the expansion of our fleet, we remain on track to reach our target of 50 EH/s by the end of this year. Notably, we raised our average operational hash rate during May to 25.7 EH/s, a 22% improvement over April.

"On the international front, we recently announced an agreement with the Ministry of Energy and Petroleum of the Republic of Kenya to support the utilization of energy and to optimize renewable energy projects across the country. While we have worked with sovereign wealth funds in the Middle East to optimize their energy infrastructure and launched a pilot project in Paraguay, this is the first time we have directly collaborated with a government to enhance their energy infrastructure. We aim to have 50% of revenues coming from overseas by 2028, and we look forward to expanding our global presence as a leader in leveraging digital asset compute to support the energy transformation."

Operational Highlights and Updates

Figure 1: Operational Highlights

  Year-Over-Year Comparison Prior Month Comparison
Metric 5/31/2024  5/31/2023  % Δ  5/31/2024  4/30/2024  % Δ 
Bitcoin Produced  616   1,245   (51)%  616   850   (27)%
Average Bitcoin Produced per Day  19.9   40.2   (51)%  19.9   28.3   (30)%
Share of available miner rewards 1  4.2%  3.7%  NA   4.2%  3.2%  NA 
Transaction Fees as % of Total 5  6.6%  12.9%  NA   6.6%  16.2%  NA 
Number of Blocks Won 5  170   171   (1)%  170   129   32%
Energized Hash Rate (EH/s) 2  29.3   15.2   93%  29.3   29.9   (2)%
 Average Operational Hash Rate (EH/s) 3  25.7   12.5   106%  25.7   21.1   22%
Installed Hash Rate (EH/s) 4  30.6   20.1   52%  30.6   29.9   2%

  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 May, Marathon energized approximately 5,000 additional miners (c. 0.7 EH/s). Approximately 9,000 miners have been reinstalled at the Ellendale facility, awaiting a return to full energization. As a result, Marathon's operating fleet increased to approximately 246,000 Bitcoin miners theoretically capable of producing 30.6 EH/s, with 237,000 miners (c. 29.3 EH/s) fully operational. In May, Marathon achieved a peak overall hash rate of 28.1 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 May 2024  Apr 2024  May 2024  Apr 2024  May 2024  Apr 2024  May 2024  Apr 2024 
Owned Operated                                    
Granbury TX Marathon  3.9   4.4   3.9   4.4   3.8   3.6   98%  82%
Garden City TX Marathon  5.4   5.8   5.4   5.8   4.5   4.6   83%  79%
Kearney NE Marathon  2.3   1.9   2.3   1.9   1.9   1.2   83%  63%
Total owned operated      11.5   12.1   11.5   12.1   10.2   9.4   89%  78%
Third-party Hosted                                    
McCamey TX Hut 8  7.6   7.6   7.6   7.6   6.4   6.2   85%  82%
Ellendale ND Applied  7.7   6.5   6.5   6.5   5.6   1.9   87%  29%
Jamestown ND Applied  1.4   1.4   1.4   1.4   1.4   1.4   98%  99%
All Other   Various  2.3   2.3   2.3   2.3   2.2   2.2   96%  96%
Total third-party hosted      19.0   17.8   17.8   17.8   15.6   11.7   88%  66%
Total      30.6   29.9   29.3   29.9   25.7   21.1   88%  71%

As of May 31, 2024 the Company holds a total of 17,857 unrestricted BTC. Marathon opted to sell 390 bitcoin in May. 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 5/31/2024  5/31/2023  % Δ  5/31/2024  4/30/2024  % Δ 
Total Cash, Cash Equivalents & Restricted Cash ($, in millions) $290.4  $97.3   198% $290.4  $145.3   100%
Unrestricted Cash  290.4   97.3   198%  290.4   133.3   118%
Restricted Cash        NA      12.0   (100)%
Total BTC Holdings (in whole numbers)  17,857   12,259   46%  17,857   17,631   1%
Unrestricted BTC Holdings  17,857   12,259   46%  17,857   17,631   1%
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FAQ

What was Marathon Digital Holdings' average operational hash rate for May 2024?

Marathon Digital Holdings reported an average operational hash rate of 25.7 EH/s for May 2024.

How much Bitcoin did Marathon Digital Holdings produce in May 2024?

Marathon Digital Holdings produced 616 BTC in May 2024.

What is the total BTC holding of Marathon Digital Holdings as of May 31, 2024?

As of May 31, 2024, Marathon Digital Holdings had 17,857 BTC.

What was the value of Marathon Digital Holdings' combined cash and BTC as of May 31, 2024?

The combined value of Marathon Digital Holdings' cash and BTC was $1.5 billion as of May 31, 2024.

What operational improvements were highlighted by Marathon Digital Holdings?

Marathon Digital Holdings highlighted operational improvements at the Ellendale facility and increased miner installations.

What international agreement did Marathon Digital Holdings enter into in May 2024?

Marathon Digital Holdings entered into an agreement with the Ministry of Energy and Petroleum of the Republic of Kenya to enhance the country's energy sector.

Marathon Digital Holdings, Inc.

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