Marathon Digital Falls Short of Revenue Prediction, Shares Plunge 8%

Marathon Digital (MARA) saw its shares drop over 8% in after-hours trading on Thursday following a second-quarter revenue report that fell short of Wall Street’s forecasts.

However, the stock has since recovered some of these losses.

Marathon Digital Sees a Revenue Miss

Marathon Digital reported second-quarter revenue of $145.1 million, falling short of Wall Street’s forecast of $157.9 million, approximately 9% lower.

The company attributed the revenue miss to operational challenges, including unexpected equipment failures, transmission line maintenance at its Ellendale site, an increased global hash rate, and the impact of the recent halving event on the mining sector.

CEO Fred Thiel noted that these issues had adversely affected the company’s BTC production. Despite these setbacks, Marathon achieved a record mining power of 31.5 exahash per second (EH/s) in the quarter. The company aims to reach a hashrate of 50 EH/s by the end of the year and plans further expansion in 2025.

Meanwhile, the miner’s adjusted EBITDA dropped to a loss of $85.1 million from a $35.8 million gain in the previous year, primarily due to unfavorable fair value adjustments of its digital assets and reduced BTC production.

In response to its financial pressures, Marathon sold 51% of the BTC it mined to cover operating costs. The company has since purchased $100 million worth of bitcoin, opting to retain all of it on its balance sheet, which now exceeds 20,000 BTC.

The report also highlighted that the average price of BTC mined in Q2 2024 was 136% higher than the previous year. On average, Marathon mined 22.9 BTC per day, a decrease of 9.3 BTC per day compared to the prior period.

Thiel has acknowledged that the company has restructured internally to better align with growth opportunities and enhance operational efficiency.

Riot Platforms Revenue Closer to Estimate

The report follows Marathon Digital’s recent legal trouble when the company was fined $138 million for breaching a non-disclosure agreement.

Meanwhile, rival crypto miner Riot Platforms recently reported revenue of $70 million for Q2 2024, marking an 8.8% decrease year-over-year. The company’s performance was notably closer to Wall Street’s estimates, with the reported revenue just 0.63% below Zacks’ prediction.

Riot Platforms’ stock (RIOT) dropped 8.54% on the earnings report day, closing at $9.32 per share. Meanwhile, MARA’s stock fell 7.78%, ending the trading day at $18.14, according to Google Finance data.