MARA Shares Drops 5%, Marathon Digital Misses Q3 2022 Revenue Estimates

UTC by Steve Muchoki · 3 min read
MARA Shares Drops 5%, Marathon Digital Misses Q3 2022 Revenue Estimates
Photo: Unsplash

Marathon Digital noted that the lower production resulted from the previously announced exit from the company’s facility in Hardin, MT, and delays in the initial energization of the King Mountain facility in McCamey, TX.

Marathon Digital Holdings Inc (NASDAQ: MARA) reported its financial results for Q3, which ended on September 30, 2022, on Tuesday. According to the quarterly report, Marathon Digital missed its revenue estimates, which resulted in its shares sliding 5 percent during the day. The company recorded a net loss of $75.4 million during the quarter compared with $22.2 million in the prior-year period.

As a Bitcoin production company, Marathon digital has revenues significantly affected by the dynamics in the cryptocurrency market. Moreover, the company made more profit when Bitcoin was at its ATH than it is down now.

“The third quarter of 2022 was a transition and rebuilding period at Marathon, during which we fully exited the Hardin facility in Montana and began energizing servers at new locations, most notably the 280-megawatt data center that resides behind the meter at the King Mountain wind farm in McCamey, Texas,” said Fred Thiel, Marathon’s chairman, and CEO.

Marathon Digital Q3 2022 Financial Results

For Q3 2022, Marathon Digital reported revenue of $12.7 million, below analysts’ estimate of $23.4 million, according to FactSet. As a result, the company reported a net loss per share of $0.65 during the third quarter, whereas analysts surveyed by FactSet expected an LPS of 23 cents.

Notably, Marathon digital generated approximately 616 Bitcoins compared to 707 units produced during the second quarter. The Bitcoin mined in the second quarter was 51 percent lower than 21Q3’s, 1,252. The company also reported a decline in Bitcoin production year-to-date through October 31, 2022, compared to the same time last year.

Marathon Digital noted that the lower production resulted from the previously announced exit from the company’s facility in Hardin, MT, and delays in the initial energization of the King Mountain facility in McCamey, TX.

The company has additionally blamed unfavorable market conditions including the fall in cryptocurrency prices. Nonetheless, the exponential rise in Bitcoin mining difficulty amid more mining rigs from competitors joining the race played a significant part.

Reportedly, the company’s Bitcoin mining rigs consisted of approximately 69,000 active equipment, which produces a hashrate of around 7.0 EH/s. According to the latest statistical data, the total Bitcoin hash rate stands at around 274 Exahashes/s.

“We believe Marathon has a strong foundation on which we can continue to build our hash rate. Our near-term goal is to reach approximately 9.0 exahashes per second by the end of the year, and we continue to target 23 exahashes per second near the middle of 2023 as we strive to establish our position as a leader in supporting and securing the bitcoin ecosystem,” Thiel added.

Meanwhile, the company’s stock has declined approximately 87 percent in the past year, and another 69% YTD. Marathon Digital has a market capitalization of approximately $1.23 billion.

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