Marathon Digital Reports Significant Increase in Bitcoin Production Amplified by Higher Average BTC Prices

Marathon Digital Holdings, Inc. (NASDAQ: MARA), a firm focused on supporting and securing the Bitcoin ecosystem, reported its financial and operational results for the quarter ended September 30, 2023.

The company says that it “recorded net income of $64.1 million, or $0.35 per diluted share, during the three months ended September 30, 2023, compared to a net loss of $72.5 million, or $0.62 loss per share, in the same period last year.”

Revenues were $97.8 million for the quarter, “significantly above third quarter 2022 revenues of $12.7 million, as a 467% increase in bitcoin production was amplified by 32% higher average bitcoin prices during the current year period.”

Gains on digital assets were $31.7 million “in the quarter as the Company sold 66% of the bitcoin produced in the quarter to fund operating costs.”

Realized gains were partially “offset by higher impairment in the carrying value of digital assets, $11.9 million versus $1.4 million in the prior-year period.”

This quarter also uniquely “benefited from a $82.6 million gain from the extinguishment of debt while the year-ago period included a $29.8 million gain on sale of equipment, a $25.0 million legal reserve, and a $39.0 million impairment due to vendor bankruptcy, all of which did not reoccur in 2023.”

Adjusted EBITDA was $43.7 million in the current year period “compared with a loss of $6.1 million in the prior year period.”

The year-over-year increase was primarily “due to improving profitability as total margin, excluding depreciation and amortization, improved to $38.2 million, up from a loss of $1.1 million in the year-ago period. Reported adjusted EBITDA also benefited from $19.8 million of bitcoin gains net of impairment losses versus a $1.4 million impairment loss in the third quarter of 2022.”

Fred Thiel, Marathon’s chairman and CEO, said:

“We made significant progress on our 2023 strategic priorities in the third quarter. First, we grew our energized hash rate 8% quarter-over-quarter to 19.1 exahashes. In addition, our new facility in Garden City started energizing last week and is expected to be fully operational later this month. Second, we experienced significantly higher uptime as optimization efforts helped increase our U.S. average operational hash rate 18% from last quarter to 14.2 exahashes. Third, we energized our first joint venture and our first international location in the UAE. This initial success has helped open new opportunities, and we recently entered into a new joint venture in Paraguay powered by hydroelectricity.”

As noted in the update:

“In preparation for next year’s halving, we took proactive measures to strengthen our financial position during the quarter. The $417 million note exchange completed in September reduced our long-term debt by 56% and captured a total of approximately $101 million in cash savings for our shareholders. For the first time in two years, our combined cash and bitcoin holdings exceeded our debt at the quarter’s end. Looking ahead, we should reach 26 exahash by year-end 2023, and we expect to grow our hash rate by approximately 30% in 2024. We expect to continue strengthening Marathon’s position as one of the largest and most energy-efficient Bitcoin mining operations globally.”

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