Marathon Records $686.7 Million Net Loss Despite 30% Increase in Mined Bitcoins in 2022
Marathon Digital Holdings, Inc. has released its financial and operational results for the fourth quarter and fiscal year 2022, which ended on December 31, 2022. Marathon is a leader in supporting and securing the Bitcoin ecosystem.
The company reported a net loss of $(686.7) million or $(6.05) per share for the fiscal year 2022, compared to a net loss of $(37.1) million or $(0.37) per share in the prior-year period. Unfavorable variances during the year compared to the prior year included several factors, such as a fourth-quarter impairment charge related to the carrying value of mining rigs and advances to vendors of $332.9 million, declines in the carrying value of digital assets of $317.6 million, lower total margin of $150.4 million, impairments related to the previously disclosed Compute North bankruptcy, and increased interest expense of $13.4 million.
Despite these challenges, the company achieved several operational milestones during the year, including doubling its hash rate to 7.0 exahashes of capacity year-over-year and producing a record 1,562 bitcoin in Q4. Marathon also increased its bitcoin production by 30% year-over-year, from 3,197 BTC in 2021 to 4,144 BTC in 2022.
Fred Thiel, Marathon’s chairman and CEO, acknowledged that 2022 was a challenging year for Bitcoin miners, but his team met each challenge head-on and emerged smarter and more resilient. Thiel cited several operational achievements during the year, including becoming more sustainably powered and deploying behind the meter at a large wind farm in Texas.
Thiel also acknowledged the negative impact of several factors on Marathon’s financial performance in 2022, such as accelerated costs related to the company’s exit from Hardin and the Compute North bankruptcy, and most significantly, a 64% decline in the price of Bitcoin that reduced Marathon’s margin and resulted in impairment charges for its Bitcoin holdings.
Despite these challenges, Marathon took proactive measures in the latter half of 2022 to strengthen its balance sheet, including fully paying down its outstanding balances under the revolving line of credit in December 2022 and terminating its credit facilities with Silvergate Bank in February 2023, which resulted in the release of 3,132 bitcoin that were previously held as collateral.
Looking ahead to 2023, Marathon has two primary goals: to energize its previously purchased mining rigs to reach its target of 23 exahashes by the middle of this year and to optimize its performance by becoming more effective. Marathon believes that these strategic actions have bolstered its financial position and will continue providing the company with optionality, which it believes is essential given the current environment.
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