Marathon Digital Holdings Blames Energy, BTC Price, and Weather Issues for $191.6M Net Loss in Q2 2022

UTC by Ibukun Ogundare · 3 min read
Marathon Digital Holdings Blames Energy, BTC Price, and Weather Issues for $191.6M Net Loss in Q2 2022
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Marathon Digital saw a 51.8% drop to $24.9 million in revenues during Q2 2022.

Bitcoin miner Marathon Digital Holdings (NASDAQ: MARA) reported a $191.6 million net loss (or $1.75 per share) in its Q2 2022 financial results. Meanwhile, the company had a net loss of $108.9 million, also $1.09 per share, in Q1 2021. The net loss Marathon reported for Q2 2022 is also a significant jump from a $13 million net loss announced in Q1 2022.

The Bitcoin miner attributed the “deeper net loss” to the fall in BTCs value between April and June. Marathon also referred to the “accelerated recognition of expenses related to the previously announced exit from Hardin, MT facility, partially offset by a gain on sale of equipment.”

Apart from Bitcoin, the entire crypto market has plunged deeply since the year began. Many cryptocurrencies dropped as much as 50% of their valuation while UST collapsed. Marathon also discussed the impact of the Bitcoin fall on its Q2 2022 performance. The crypto miner said the price decrease affected the carrying value of crypto assets.

“The decrease in Bitcoin’s price had a significant impact on the Company’s carrying value of digital currencies. On a combined basis, digital currencies subject to impairment and digital currencies held in the investment fund resulted in an expense of $207.3 million in the currency-year quarter compared with a combined expense of $125.8 million in the prior-year period, an unfavorable $81.5 million period over-period variance.”

Marathon Digital Says Lower Revenue per BTC Mined Affects Q2 2022 Revenue

In addition, Marathon saw a 51.8% drop to $24.9 million in revenues during Q2 2022. The company amassed $29.3 million during the second quarter of 2021. The Bitcoin miner explained that the revenue difference was a result of lower revenue per BTC mined, partially offset by an 8% gain in Bitcoin production activity.

Furthermore, the company said it produced 707 BTC, surpassing the 655 Bitcoin produced in Q2 2021. However, the mined coins are 445 lower than the 1,259 BTC announced in the first quarter. Marathon blamed the loss on “prolonged energization delays in Texas. Weather-related issues that affected the power facility in Montana and maintenance are also some of the causes of the low Bitcoin production last quarter.

Commenting on the Q2 2022 performance, Marathon Chairman and CEO Fred Thiel noted:

“Energization delays, maintenance and weather issues in Montana and an approximately 56% decline in the price of bitcoin during the quarter, severely impacted our bitcoin production and financial results. These items reduced our revenues, caused us to record a $127.6 million impairment on our bitcoin holdings, and decreased the fair market value of our investment fund by $79.7 million. However, given the groundwork we laid during the quarter and the progress we have made since. We are optimistic that Marathon’s operational and financial positioning is improving.”

At press time, the stock of the Bitcoin miner is down 2.43% to $14.08 in after-hours trading.

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Ibukun Ogundare

Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience. Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.

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