Marathon Digital’s Q1 Earnings Miss Expectations Due to Weather and Equipment Failures

Marathon Digital, a major player in the Bitcoin mining sector, reported lower-than-expected revenue for Q1 2024, citing severe weather conditions and equipment failures as primary disruptors. Despite a year-on-year revenue increase of 223% reaching $165.2 million, the figures fell short of the $193.9 million forecast by Zacks Investment Research, according to Cointelegraph.

During Q1, Marathon mined 2,811 BTC, valued at approximately $176.7 million, marking a significant increase from the previous year but a decrease from Q4 2023’s output of 4,242 BTC. The reduction in mining output was primarily due to unexpected equipment failures, notably transformers at third-party hosted sites, and maintenance issues with utility company transmission lines, alongside higher than anticipated weather-related curtailments across several sites, including their new Garden City location in central Texas.

CEO Fred Thiel addressed these challenges in the earnings call, noting that despite the setbacks, the company had managed to reach a record operational level of 27 exahashes per second. Thiel also reiterated the company’s revised year-end target, aiming to ramp up to 50 EH/s, up from the previously set goal of 35 to 37 EH/s.

Financially, Marathon’s first-quarter net income showed a substantial year-on-year increase of 184% to $337.2 million, translating to $1.26 per share, which exceeded the Zacks estimate of $0.02 per share. This boost was significantly aided by the adoption of new Financial Accounting Standards Board (FASB) rules allowing the company to record a $488.8 million quarterly paper gain on the 17,320 BTC it held as of March 31.