In a spectacular if not wholly surprising earnings miss, Nasdaq-listed bitcoin miner Marathon Digital Holding fell 45% short of analyst estimates with third-quarter revenues that came in at US$12.7mln.
The company recorded a net loss of US$75.4mln, or US$0.65 per share, during the quarter compared with net losses of US$22.2mln, or US$0.22 per share a year ago.
The company produced 616 bitcoin in the third quarter, a 51% decrease from the 1,252 bitcoin in the third quarter of 2021 and a 13% sequential decrease from 707 bitcoin in the prior quarter.
The lower production resulted from the previously announced exit from the company’s facility in Hardin, MT and delays in the initial energization of the King Mountain facility in McCamey, TX.
Unfavourable earnings were chalked up following higher interest expenses, legal settlements, decreased production (likely due to record-high mining difficulty) and accelerated cost recognition from the Hardin exit.
Fred Thiel, chairman and chief executive, said: “The third quarter of 2022 was a transition and rebuilding period at Marathon, during which we fully exited the Hardin facility in Montana and began energizing servers at new locations, most notably the 280-megawatt data centre that resides behind the meter at the King Mountain wind farm in McCamey, Texas.
“We also realised our highest production month to date in October when we produced 615 bitcoin, nearly equal to our entire production during the third quarter.”
As of November 1, the company’s operating mining fleet consisted of approximately 69,000 active miners, producing approximately 7.0 EH/s
Marathon Digitial is targeting approximately 9.0 EH/s by the end of the year, “and we continue to target 23 EH/s near the middle of 2023 as we strive to establish our position as a leader in supporting and securing the bitcoin ecosystem,” stated Thiel.
MARA shares dipped 5% to US$9.96 following the earnings call.
Year-to-date (YTD) losses of 70% actually outperform some of Marathon Digital’s competitors – Core Scientific is currently down nearly 99% YTD while Hut 8 Mining Corp (TSX:HUT) is down nearly 75% on the Toronto exchange.