Marathon Digital (MARA) shares plummeted up to 8% in post-market trade on Thursday after the company’s second-quarter sales fell short of Wall Street projections. The shares have recovered some of their losses since then.
According to FactSet data, Marathon reported revenue of $145.1 million, compared to an estimate of $157.9 million. According to the company’s earnings reports, Marathon’s sales fell in the second quarter due to multiple operational problems that hindered its capacity to mine Bitcoin and a recent halving that weighed on the mining sector.
According to its results report released on August 1, the shortfall occurred despite a 78% year-on-year revenue rise from $81.7 million in Q2 2023.
According to Google Finance data, MARA’s stock price dropped 7.78% following the report’s release, closing the day at $18.14.
As Bitcoin miners struggled during the quarter due to higher operational costs following the April halving, Marathon Digital reported that it sold 51% of its Bitcoin to cover operating expenses.
The report stated that Marathon’s average price of BTC mined in the second quarter of 2024 was 136% more than the previous year period. Marathon mined an average of 22.9 Bitcoin per day, 9.3 less than the prior quarter.
During the second quarter of 2024, our BTC production was impacted by unexpected equipment failures and transmission line maintenance at the Ellendale site operated by Applied Digital, increased global hash rate, and the April halving event.
Fred Thiel, the firm’s CEO
In the second quarter, Marathon reported that the issues had been resolved and that the company had achieved an all-time peak mining power of 31.5 exahash per second (EH/s).
The miner also reported that its second-quarter adjusted EBITDA decreased from $35.8 million in the previous year to $85.1 million, primarily as a result of unfavorable fair value adjustments to its digital assets and a decrease in the amount of BTC mined during the quarter.
Despite the challenges it faces, the miner remains committed to achieving a hash rate of 50 EH/s by the end of the year and intends to expand further in 2025.
Marathon misses Wall Street estimates
Marathon has now missed consensus estimates for the second quarter in a row, having also failed to meet them in the first quarter.
At that time, Marathon’s Q1 revenues increased 223% year-over-year to $165.2 million in results released on May 9. However, it failed to meet the $193.9 million estimate from investment analyst firm Zacks by 14.80%.
As reported on July 23, Marathon has been fined $138 million for violating a non-disclosure or non-circumvention agreement.
On the other hand, Riot Platforms, a competitor in the crypto mining industry, reported a revenue of $70 million for Q2 2024, which represents an 8.8% decrease from the previous year, according to its financial report published on July 31.
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