Bitcoin Miner Marathon First-Quarter Revenue Beats Estimates as SEC Expands Probe
Marathon Digital Holdings (MARA), one of the largest publicly traded crypto miners in North America, reported a smaller-than-expected loss per share in the first quarter as a rising bitcoin price and increased production helped lift the Las Vegas-based company back against profitability.
The company also said it received a new subpoena from the US Securities and Exchange Commission (SEC), which is looking into, among other things, related party transactions that may have violated federal securities law. The company said it is cooperating with the investigation.
Marathon posted a net loss of $0.05 per share, compared with an average estimate of $0.08, according to FactSet data. The loss narrowed from the previous quarter, when it was $3.14, as well as the same period in 2022, when it was $0.12, according to a Wednesday report. Revenue rose to $51.1 million from $28.4 million in the previous three months. The number has changed little from the same period last year. Analysts had forecast revenue of $48.8 million for the quarter.
After facing construction and operational hurdles last year, including the bankruptcy of one of their hosting partners – Compute North, Marathon has ramped up production. The firm’s operational hashrate increased 64% quarter-on-quarter to 11.5 exahash/second (EH/s), with bitcoin production hitting a record of BTC 2,195 ($80 million) in the quarter. The price of bitcoin rose by more than 70% in the first quarter.
“After weathering a turbulent 2022 that tested the resilience of our entire industry, this year is off to a strong start as we increased our hash rate, reduced our cost to mine and improved our balance sheet during the first quarter,” Chairman and CEO Fred Thiel said in the statement.
Marathon shares fell more than 2% in premarket Nasdaq trading Thursday.
The SEC subpoena follows an earlier one regarding the issuance of 6 million shares of common stock related to the Hardin, Montana facility.
The company is working to expand its operations to the Middle East. This week it announced a joint venture with an investment company backed by Abu Dhabi’s sovereign wealth fund for a 200 megawatt (MW) immersion-cooled plant in the emirate.
Along with other miners, Marathon sold almost all of its mined bitcoin in February, ending a long-running strategy to hold production.
It has also worked to reduce debt levels, which were among the highest of any listed miner. In March, it terminated a credit facility with Silvergate Bank after previously paying $30 million to the now-defunct bank.
DIRECTION (11 May, 14:10): Corrects the company’s head office in the first paragraph.
