Marathon Digital Holdings, Inc.
(NASDAQ:MARA) ("Marathon"
or "Company"), one of the largest enterprise Bitcoin
self-mining companies in North America, reported its financial and
operational results for the quarter ended March 31, 2022.
First Quarter 2022 Financial ResultsRevenue
increased to $51.7 million, an increase of $42.6 million, or 465%,
from the prior-year quarter and a decrease of $8.6 million, or 14%,
from the fourth quarter of 2021. Bitcoin production increased to
1,259 bitcoin during the period, a 556% increase from the
prior-year quarter and a 15% increase from the fourth quarter of
2021. The revenue decline from the fourth quarter of 2021 was the
result of an approximate 25% decrease in average revenue per
bitcoin mined, partially offset by the increase in bitcoin
production during the first quarter of 2022.
Despite higher earnings contributions resulting from the
expansion of the Company’s bitcoin mining operations, GAAP net loss
for the quarter totaled $13.0 million, or ($0.13) per share,
compared to net income of $83.4 million, or $0.87 per diluted
share, in the prior-year quarter. The current-year quarter includes
$19.6 million in impairment charges related to self-mined bitcoin
held by the Company and a $5.5 million decrease in the fair market
value of the Company’s investment fund. The prior-year period
included $0.7 million in impairment charges related to self-mined
bitcoin held by the Company and a $131.8 million increase in the
fair market value of the Company’s investment fund.
Total margin, defined as revenues less cost of revenue,
increased $18.6 million from the prior-year period. Total margin
excluding the impact of depreciation and amortization increased
$35.8 million from the prior-year period.
Adjusted EBITDA for the quarter totaled $39.4 million, an
increase of $33.3 million from the prior-year period. The
year-over-year increase was primarily related to the higher total
margin excluding depreciation and amortization, which resulted from
increased mining activities.
As of March 31, 2022, cash on hand was $118.5 million. Total
liquidity available to the Company, defined as cash on hand plus
available revolving credit facilities, was $218.5 million.
Additionally, the Company held approximately 9,374 bitcoin with an
approximate fair market value of $427.7 million at March 31,
2022.
First Quarter 2022 Highlights
- Produced a record 1,259 bitcoin, a 556% increase from 192
bitcoin in the first quarter of 2021 and a 15% sequential increase
from 1,098 bitcoin in the prior quarter
- Increased hash rate 449% year-over-year and 14% from the prior
quarter with the total number of miners deployed increasing to
36,830 miners, which could generate approximately 3.9 EH/s, as of
March 31, 2022
- Received permission from Texas grid operators for all 280 MW of
first major facility in Texas to be energized as construction of
Compute North’s new facilities continued unimpeded
- Announced intent to transition miners out of fossil fuel
powered facility in Hardin, MT as part of the Company’s initiative
to achieve 100% carbon neutrality by year-end 2022
- Augmented the executive team by appointing Hugh Gallagher to
chief financial officer as Sim Salzman transitioned to the newly
created position of chief accounting officer
- Appointed Doug Mellinger to the
Company’s board of directors.
Management Commentary“In the first quarter of
2022, we increased our bitcoin production 556% year-over-year and
15% from the prior quarter, producing a record 1,259 bitcoin even
as the global hash rate rose by approximately 17% in the same
period,” said Fred Thiel, Marathon’s chairman and CEO. “At
Marathon, we are constantly pushing boundaries to propel our
business and our industry forward, but as the first quarter and
subsequent events have demonstrated, not every industry operates at
the same pace as we do. Innovation is not a linear process, and in
the first quarter, we experienced regulatory friction related to
breaking the mold on deploying our miners behind the meter at power
facilities operated by some of the largest renewable energy
companies in the United States. As a result, our deployment
schedule shifted by 45 days in the first quarter. Encouragingly, in
March, the grid operators in Texas granted permission for all 280
megawatts of the first major facility in Texas to be energized.
Currently, the pace of deployment is predominantly determined by
the pace of construction, which continued unimpeded as we worked
through the regulatory and permitting friction.
“Our primary focus for 2022 remains the deployment of our
miners. This year is all about execution. Given the progress we
have made to date in deploying behind the meter, we believe we will
be through our backlog of miners and fully back on track with
deployments before the end of this year, keeping us on pace to
reach 23.3 EH/s by early 2023. We believe 2022 will be
transformational for Marathon as we are in the process of deploying
nearly 200,000 miners and transitioning our operations to be 100%
carbon neutral.”
Earnings Webcast and Conference CallMarathon
Digital Holdings will hold a webcast and conference call today at
4:30 p.m. Eastern time to discuss these results. To register to
participate in the conference call, or to listen to the live audio
webcast, please use this link. The webcast will also be broadcast
live and available for replay via the investor relations section of
the Company’s website at ir.marathondh.com.
Date: Today, May 4, 2022Time: 4:30 p.m. Eastern time (1:30 p.m.
Pacific time)Registration link: LINK
If you have any difficulty connecting with the conference call,
please contact Marathon’s investor relations team at
ir@marathondh.com.
Investor Notice Investing in our
securities involves a high degree of risk. Before making an
investment decision, you should carefully consider the risks,
uncertainties and forward-looking statements described under "Risk
Factors" in Item 1A of our most recent Annual Report on Form 10-K
for the fiscal year ended December 31, 2021, filed with the
SEC on March 10, 2022. If any of these risks were to occur, our
business, financial condition or results of operations would likely
suffer. In that event, the value of our securities could
decline, and you could lose part or all of your investment.
The risks and uncertainties we describe are not the only ones
facing us. Additional risks not presently known to us or that we
currently deem immaterial may also impair our business operations.
In addition, our past financial performance may not be a reliable
indicator of future performance, and historical trends should not
be used to anticipate results in the future. Future changes in the
network-wide mining difficulty rate or Bitcoin hash
rate may also materially affect the future performance of
Marathon's production of bitcoin. Additionally, all discussions of
financial metrics assume mining difficulty rates as of May 2, 2022.
See "Forward-Looking Statements" below.
Forward-Looking Statements Statements made
in this press release include forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements can be identified by the use of words
such as “may,” “will,” “plan,” “should,” “expect,” “anticipate,”
“estimate,” “continue,” or comparable terminology. Such
forward-looking statements are inherently subject to certain risks,
trends and uncertainties, many of which the Company cannot predict
with accuracy and some of which the Company might not even
anticipate and involve factors that may cause actual results to
differ materially from those projected or suggested. Readers are
cautioned not to place undue reliance on these forward-looking
statements and are advised to consider the factors listed above
together with the additional factors under the heading “Risk
Factors” in the Company's Annual Reports on Form 10-K, as may be
supplemented or amended by the Company's Quarterly Reports on Form
10-Q. The Company assumes no obligation to update or supplement
forward-looking statements that become untrue because of subsequent
events, new information or otherwise.
About Marathon Digital Holdings Marathon
is a digital asset technology company that mines bitcoin with a
focus on the blockchain ecosystem and the generation of digital
assets.
Marathon Digital
Holdings Company Contact: Telephone:
800-804-1690Email: ir@marathondh.com
MARATHON DIGITAL HOLDINGS, INC. AND
SUBSIDIARIESCONSOLIDATED CONDENSED STATEMENTS OF
OPERATIONS (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
|
2022 |
|
|
|
2021 |
|
|
Revenues |
|
|
|
|
|
|
|
Digital currency mining |
|
|
|
|
51,717,718 |
|
|
$ |
9,152,815 |
|
|
Total
revenues |
|
|
|
|
51,717,718 |
|
|
|
9,152,815 |
|
|
|
|
|
|
|
|
|
|
Costs and
expenses |
|
|
|
|
|
|
|
Cost of revenue |
|
|
|
|
26,393,636 |
|
|
|
2,406,415 |
|
|
Operating and administrative expenses |
|
|
|
|
|
|
|
Compensation and related taxes |
|
|
|
|
10,342,967 |
|
|
|
52,405,786 |
|
|
Professional fees |
|
|
|
|
2,247,378 |
|
|
|
426,638 |
|
|
General and administrative |
|
|
|
|
1,389,388 |
|
|
|
307,191 |
|
|
Impairment of mined digital currency |
|
|
|
|
19,551,254 |
|
|
|
662,199 |
|
|
Impairment of patents |
|
|
|
|
919,363 |
|
|
|
- |
|
|
Total operating and administrative expenses |
|
|
|
|
34,450,350 |
|
|
|
53,801,814 |
|
|
Operating income
(loss) |
|
|
|
|
(9,126,268 |
) |
|
|
(47,055,414 |
) |
|
Other income
(expenses) |
|
|
|
|
|
|
|
Change in fair value of investment fund |
|
|
|
|
(5,541,642 |
) |
|
|
131,822,950 |
|
|
Change in fair value of warrant liability |
|
|
|
|
- |
|
|
|
(1,591,895 |
) |
|
Interest income |
|
|
|
|
228,693 |
|
|
|
183,828 |
|
|
Other income (expenses) |
|
|
|
|
(2,400 |
) |
|
|
(1,524 |
) |
|
Total other (expenses)
income |
|
|
|
|
(5,315,349 |
) |
|
|
130,413,359 |
|
|
Interest expense |
|
|
|
|
(2,814,036 |
) |
|
|
(1,203 |
) |
|
Loss before income
taxes |
|
|
|
$ |
(17,255,653 |
) |
|
$ |
83,356,742 |
|
|
Income tax benefit |
|
|
|
|
4,297,064 |
|
|
|
- |
|
|
Net income
(loss) |
|
|
|
$ |
(12,958,589 |
) |
|
$ |
83,356,742 |
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share, basic: |
|
|
|
$ |
(0.13 |
) |
|
$ |
0.88 |
|
|
Net income (loss) per
share, diluted: |
|
|
|
$ |
(0.13 |
) |
|
$ |
0.87 |
|
|
Weighted average
shares outstanding, basic: |
|
|
|
|
103,102,596 |
|
|
|
94,350,216 |
|
|
Weighted average
shares outstanding, diluted: |
|
|
|
|
103,102,596 |
|
|
|
96,251,240 |
|
|
Marathon Digital Holdings, Inc. and
Subsidiaries Supplemental Information and Non-GAAP
Financial Measures
The supplemental information that follows is
intended to provide additional data to investors on certain
production metrics as well as financial measures including Total
Margin and Non-cash operating expenses. We are also providing
reconciliations from GAAP net income to the non-GAAP measures (i)
Adjusted Net Income and (ii) Adjusted EBITDA. We define Adjusted
Net Income as GAAP net income (or loss) for the period with
adjustments to add back the impacts of (1) stock compensation
expense, net of withholding taxes (2) changes in the fair market
value of our investment fund and (3) the tax effects of the
aforementioned adjustments. This non-GAAP measure is used by
management to evaluate earnings performance from period-to-period
given that (i) we expect that share-based compensation expense will
continue to be a recurring expense that may vary significantly from
period-to-period and (ii) we also hold digital currencies in an
investment fund that requires fair value accounting of the bitcoin
held in the fund. Given that this treatment is fundamentally
different from the accounting for our self-mined bitcoin (a
long-lived intangible that is evaluated for impairment but not
reported at market value) and can also vary significantly from
period-to-period, we believe our measure of Adjusted Net Income
provides management and investors with a meaningful view of
earnings resulting from current operating activities. We define
Adjusted EBITDA as GAAP net income (or loss) for the period with
adjustments to add back the impacts of (1) depreciation and
amortization (2) interest expense (3) income tax expense and (4)
adjustments for non-cash and non-recurring items which currently
include (i) stock compensation expense, net of withholding taxes
(ii) changes in the fair market value of our investment fund (iii)
changes in the fair value of warranty liability (iv) impairment of
digital currencies and (v) other impairments of long-lived assets.
Adjusted EBITDA in future periods would also likely include
adjustments for unusual or infrequent items that might impact the
comparability of our financial results, for example losses on early
extinguishments of debt or unusually large gains or losses on sales
of assets if these items were to occur. This non-GAAP measure is
used by management in evaluating operating performance and we
believe it to be a meaningful non-GAAP measure used by investors to
compare the Company’s operating performance with that of other
companies within the industry.
These supplemental financial measures are not
measurements of financial performance under generally accepted
accounting principles in the United States (“GAAP”) and, as a
result, these measures may not be comparable to similarly titled
measures of other companies. Management uses these non-GAAP
financial measures internally to help understand, manage, and
evaluate our business performance and to help make operating
decisions. We believe that this combination of reconciliations from
GAAP net income to non-GAAP measures is important when taken
together with the GAAP financial results in that they provide a
meaningful view of earnings performance for management and
investors. We also believe that these non-GAAP measures provide
additional information to investors about the Company’s performance
because they eliminate certain items not associated with
current-period transactions and other significant discrete items
that might impact the comparison of period-to-period results
Non-GAAP financial measures are subject to
material limitations as they are not in accordance with, or a
substitute for, measurements prepared in accordance with GAAP. Our
non-GAAP financial measures are not meant to be considered in
isolation and should be read only in conjunction with our Quarterly
Reports on Form 10-Q and our Annual Reports on Form 10-K as filed
with the Securities and Exchange Commission.
Adjusted Net Income |
|
For the three months ended March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Net income (loss) |
|
$ |
(12,958,589 |
) |
|
$ |
83,356,742 |
|
Adjustments: |
|
|
|
|
Stock Compensation Expense,
net of withholding taxes |
|
|
9,275,352 |
|
|
|
51,031,595 |
|
Change in FMV of investment
fund |
|
|
5,541,642 |
|
|
|
(131,822,950 |
) |
Income tax impact of
adjustments, net |
|
|
(3,681,985 |
) |
|
|
- |
|
Adjusted net income
(loss) |
|
$ |
(1,823,580 |
) |
|
$ |
2,565,387 |
|
|
|
|
|
|
Adjusted net income (loss) per
share, basic: |
|
$ |
(0.02 |
) |
|
$ |
0.03 |
|
Adjusted net income (loss) per
share, diluted: |
|
$ |
(0.02 |
) |
|
$ |
0.03 |
|
|
|
|
|
|
Weighted average shares
outstanding, basic: |
|
|
103,102,596 |
|
|
|
94,350,216 |
|
Weighted average shares
outstanding, diluted: |
|
|
103,102,596 |
|
|
|
96,251,240 |
|
Adjusted EBITDA |
|
For the three months ended March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Net income
(loss) |
|
$ |
(12,958,589 |
) |
|
$ |
83,356,742 |
|
Adjustments: |
|
|
|
|
Depreciation and Amortization |
|
|
18,538,926 |
|
|
|
1,298,937 |
|
Interest expense |
|
|
2,814,036 |
|
|
|
1,203 |
|
Income tax expense (benefit) |
|
|
(4,297,064 |
) |
|
|
- |
|
EBTIDA |
|
$ |
4,097,309 |
|
|
$ |
84,656,882 |
|
Adjustments for
non-cash and non-recurring items: |
|
|
|
|
Stock compensation expense, net of withholding tax |
|
|
9,275,352 |
|
|
|
51,031,595 |
|
Change in FMV of investment fund |
|
|
5,541,642 |
|
|
|
(131,822,950 |
) |
Change in fair value of warranty liability |
|
|
- |
|
|
|
1,591,895 |
|
Impairment of digital currencies |
|
|
19,551,254 |
|
|
|
662,199 |
|
Impairment of patents |
|
|
919,363 |
|
|
|
- |
|
Adjusted
EBITDA |
|
$ |
39,384,920 |
|
|
$ |
6,119,621 |
|
|
|
For the three months ended March 31, |
Supplemental Information |
|
|
2022 |
|
|
|
2021 |
|
Revenues |
|
$ |
51,717,718 |
|
|
$ |
9,152,815 |
|
Cost of revenues (includes
depreciation and amortization) |
|
|
26,393,636 |
|
|
|
2,406,415 |
|
Total margin (1) |
|
|
25,324,082 |
|
|
|
6,746,400 |
|
Operating and administrative
expenses |
|
|
34,450,350 |
|
|
|
53,801,814 |
|
Operating income (loss) |
|
|
(9,126,268 |
) |
|
|
(47,055,414 |
) |
Other income (loss) |
|
|
(5,315,349 |
) |
|
|
130,413,359 |
|
Interest expense |
|
|
(2,814,036 |
) |
|
|
(1,203 |
) |
Income (loss) before income
taxes |
|
|
(17,255,653 |
) |
|
|
83,356,742 |
|
Income tax expense
(benefit) |
|
|
4,297,064 |
|
|
|
- |
|
Net income (loss) |
|
|
(12,958,589 |
) |
|
|
83,356,742 |
|
|
|
|
|
|
Adjusted net income
(loss) |
|
|
(1,823,580 |
) |
|
|
2,565,387 |
|
Total margin excluding
depreciation and amortization |
|
|
43,863,008 |
|
|
|
8,045,337 |
|
Adjusted EBITDA |
|
|
39,384,920 |
|
|
|
6,119,621 |
|
Bitcoin self-mined during the
period |
|
|
1,258.6 |
|
|
|
191.8 |
|
(1) Total margin is defined as revenues less cost of
revenues
Grafico Azioni Marathon Digital (NASDAQ:MARA)
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Da Feb 2024 a Mar 2024
Grafico Azioni Marathon Digital (NASDAQ:MARA)
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Da Mar 2023 a Mar 2024