Marathon Digital Bitcoin Production Decreased by 34% in Q1 2024

Marathon Digital Holdings, Inc., a US-based Bitcoin mining company, showcased a mixed financial performance in the first quarter 2024.

This period brought significant growth in hash rate and revenues. Yet, it also presented several operational challenges.

Marathon Digital Faced Financial and Operational Challenges Amidst Growth

Marathon’s Q1 2024 revenues soared by 223% compared with Q1 2023 to $165.2 million. Its net income rose 184% to $337.2 million from the same quarter in 2023.

Additionally, the company produced 2,811 BTC, a 28% increase from Q1 2023. However, compared to the Q4 2023, this figure marks a decrease of roughly 34%.

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Fred Thiel, Marathon Digital’s CEO, explained the reason behind it. He cites unexpected equipment failures and maintenance issues adversely impacting the company’s Bitcoin production.

“Bitcoin production, and therefore revenues, generated during the quarter was negatively impacted by unexpected equipment failures, transmission line maintenance, and higher than anticipated weather-related curtailments at Garden City and other sites during the quarter,” Thiel stated.

Indeed, Marathon’s Bitcoin production trails behind Core Scientific, another US-based Bitcoin mining company. Core Scientific reported 2,825 Bitcoin (BTC) mined during Q1 2024.

Nonetheless, the start of 2024 has been a period of notable expansion for Marathon Digital. The company reported a 142% increase in its energized hash rate, reaching 27.8 exahash per second (EH/s). The figure is up from 11.5 EH/s in the same period last year.

Marathon also expanded its technological infrastructure and product offerings. This quarter saw the introduction of Anduro, a new multi-chain Bitcoin layer-two network. Anduro aims to foster Bitcoin’s development and adoption.

Moreover, Marathon launched several innovative products to enhance the efficiency and performance of Bitcoin mining operations. Among these were Slipstream, a service for speeding up Bitcoin transaction confirmations, and MARA UBC 2100, a control board developed internally to optimize mining operations.

Furthermore, the company has aggressively pursued expansion through acquisitions. It added more than 1.1 gigawatts to its mining capacity.

Notably, 54% of this capacity is now under Marathon’s direct control and operation. This strategic expansion is aligned with Marathon’s ambitious target. It aims to boost its hash rate to 50 EH/s by the end of 2024, doubling its current capacity.

However, Marathon’s overall performance in the quarter didn’t meet analysts at Zacks Equity Research’s estimation. Marathon’s reported revenues missed the Zacks consensus estimate by 14.80%. This led Zacks to adjust the current rank of Marathon Digital’s stock (MARA) status to “hold.”

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Marathon Digital’s stock (MARA) price dropped after the earnings report. During after-hours trading, MARA’s price dipped to $18.60 on May 9. In a longer time frame, MARA’s price has been down 14.30% year-to-date.