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Marathon Digital has also revealed the nature of its exposure to the now-defunct crypto-focused Silvergate Bank.
Embattled Bitcoin (BTC) mining firm, Marathon Digital Holdings Inc (NASDAQ: MARA) has released its performance report for the fourth quarter (Q4) of 2022 in which it unveiled a poorer-than-expected revenue. According to the firm, its revenue came in at $28.4 million, down by 58% from its year-ago record.
Marathon Digital operates in a very strained market as the global economy, the high cost of energy, and the dwindling price of Bitcoin have largely kept the business on the edge over the past year. While the expectations for the firm have remained low, the revenue it reported is even lower than the $38.4 million that had been projected a while ago.
According to the company, its full-year performance also showcased its struggles in the year-to-date period. The Las Vegas, Nevada-headquartered firm said its full-year revenue it recorded for the 2022 financial year slumped by as much as 26% to $117.8 million. This figure was from a restated value of $159.2 million in 2021.
Amidst its operational woes which almost lead it to a sustained bankruptcy, Marathon Digital said it recorded an impairment loss of $686.7 million, a figure that far surpasses the $37.1 million loss it accrued in 2021.
In explaining its woes, the company said its performance was impacted by a “fourth quarter impairment charge related to the carrying value of mining rigs and advances to vendors” of $332.9 million and “declines in the carrying value of our digital assets” that totaled $317.6 million.
Despite the news of its performance reports which were below expectations, the shares of Marathon Digital are on the rise to show a good correlation with Bitcoin. The shares closed at a positive rate of 7.62% on Thursday and are up by more than 6% in the pre-market to $8.06.
Marathon Digital Revenue and the Silvergate Saga
Marathon Digital has also revealed the nature of its exposure to the now-defunct crypto-focused Silvergate Bank. According to the company, it has a loan agreement which it recently terminated following the bank’s recent failures.
“In February 2023, we terminated our credit facilities with Silvergate Bank, which resulted in the release of 3,132 bitcoin that were previously held as collateral,” CEO Fred Thiel said in a statement. “We are also pursuing alternative banking relationships in light of the recent developments with Signature Bank.”
Amidst all of its financial and performance woes, Marathon Digital still recorded an impressive Bitcoin production metric. According to the company, its Bitcoin production was up by 42% in the fourth quarter and by 30% in the full year. In figure terms, a total of 1,562 BTC was mined in the fourth quarter and 4,144 in the full year.
While this year seems to start on a better note for the company, the company sold off all of the BTC it mined in February to offset some of its outstanding obligations.