Marathon Digital logs record earnings as it pushes past 'operational challenges'

By Emily Bary

The company sold 26% of the bitcoin it produced during the first quarter

Marathon Digital Holdings Inc. said that it faced "operational challenges" in the latest quarter but managed nonetheless to take advantage of the cryptocurrency boom.

The bitcoin-mining company on Thursday posted first-quarter net income of $337.2 million, or $1.26 a share, compared with net income of $118.7 million, or 72 cents a share, in the year-before period.

The company also posted adjusted earnings before interest, taxes, depreciation and amortization of $528.8 million, up from $144.5 million a year ago.

Marathon's (MARA) revenue rose to $165.2 million from $51.1 million, while analysts were expecting $182.1 million. Both the revenue and net-income totals were records, Marathon said.

Shares dipped 1% after hours.

"Despite the operational challenges we faced in the first quarter, we were able to leverage our agility to redistribute equipment to newly acquired sites amidst ongoing repairs," Chief Executive Fred Thiel said in a release. "When combined with our HODL strategy, these actions allowed us to capitalize on bitcoin's positive momentum and produce record financial results for the quarter."

See also: Bitcoin is trading sideways, but get ready for another rally in September

Marathon describes that HODL strategy on its website, where it calls itself "frequently" one of the biggest bitcoin holders among listed U.S. companies. "We HODL (hold) a large amount of bitcoin as a tenet of our corporate treasury strategy," the website says.

The company sold 26% of the bitcoin it produced during the first quarter, putting the proceeds toward operating expenses.

Operational challenges in the first quarter included equipment malfunctions and greater weather disruptions than Marathon had projected.

Marathon disclosed a $488.8 million quarterly gain on digital assets, whereas it racked up $137.4 million in such gains during the same period a year before. The difference in gains largely reflected a dramatically higher bitcoin price in the early part of 2024 relative to what was seen in 2023.

For instance, the price of bitcoin (BTCUSD) exceeded $71,000 at the end of March 2024, whereas it was over $28,000 at the end of March 2023, Marathon noted.

-Emily Bary

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05-09-24 2014ET

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