Bitcoin Miner Marathon Digital Misses Q3 Revenue Estimates, Lowers Hashrate Outlook for 2022

Marathon Digital (MARA), one of the largest bitcoin miners in the world, reported third quarter revenue of $12.7 million, shy of the average analyst estimate of $23.4 million, according to FactSet data.

Net loss per share was $0.72 for the quarter, worse than the average estimate of $0.15 as per FactSet.

Shares fell 5.1% in the regular session today alongside a steep drop in bitcoin (BTC) to about $18,000. The stock's lower by another 2.2% in after hours action.

In addition to the miss, Marathon trimmed its year-end 2022 computing power, or hashrate expectations from previous guidance of 11.5 exahash/second (EH/s) to 9 EH/s. The company, however, reiterated its goal to have 23 EH/s of computing power running mid-2023. Hashrate as of Nov. 1 was 7 EH/s.

CEO Fred Thiel called the quarter a transitionary period as his company exited a site in Hardin, Montana and began energizing operations in Texas.

The lowering of year-end hashrate guidance isn't totally unexpected as doubts had previously emerged about Marathon’s ability to deliver on that prediction, with Jefferies in a note on Monday saying that the company faced downside risks on its growth targets.

The first risk, said Jefferies, is Marathon's expectation of 3.2 EH/s to be plugged into a Compute North facility in Texas. In addition to regulatory delays, there's the issue of Compute North's bankruptcy, and whether Marathon might have to renegotiate terms with the hosting company. The other risk, said the bank, is 12.2 EH/s expected from Applied Blockchain (APLD) facilities in North Dakota and Texas, which are also facing regulatory delays.

Speaking on the earnings call, Thiel said Marathon expects a positive answer soon from Texas regulators regarding Compute North's site. Thiel also said the company is looking for opportunities overseas, specifically South America, the Middle East and parts of Asia.

Read more: Crypto Miner Marathon Digital Mines Record 615 Bitcoin in October