Marathon(US:MARA)2022-08-09 02:07Financial Data and Key Metrics Changes - The company reported a net loss of $191.6 million for Q2 2022, compared to a net loss of $108.9 million in the same period last year, marking an increase in loss of $82.7 million [15][20]. - Revenue for the quarter was $24.9 million, down from $29.3 million in Q2 2021, a decrease of $4.4 million driven by lower revenue per bitcoin mined [16][18]. - Adjusted EBITDA was a loss of $147.2 million, compared to a loss of $105.2 million in the prior year, reflecting a decline of $42.1 million primarily due to the decline in carrying value of digital assets [21]. Business Line Data and Key Metrics Changes - Bitcoin production was significantly impacted by downtime and maintenance issues, resulting in approximately 45% less bitcoin produced than the theoretical capacity if operating at 90% uptime [11]. - The company faced operational challenges, including a severe storm that damaged the power plant, affecting 30,000 miners, which represented about 75% of the active fleet at that time [11][12]. Market Data and Key Metrics Changes - Bitcoin's price declined approximately 56% during the quarter, while energy prices increased due to geopolitical factors, compressing margins across the industry [8][9]. - The global hash rate growth was slower than anticipated, with multiple downward adjustments in the difficulty rate since May [8]. Company Strategy and Development Direction - The company aims to grow as a leader in the bitcoin ecosystem by maintaining a lean operation and asset-light model, avoiding large capital expenditures for data centers or power assets [9][30]. - Recent strategic moves include securing new hosting arrangements and expanding agreements to achieve prior hash rate targets, with a focus on energy efficiency and cost reduction [32][34][36]. Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macro environment but expressed confidence in the company's resilience and ability to capitalize on opportunities to improve operational and financial positions [30][41]. - The company is optimistic about energizing miners in Texas and achieving a target of 23.3 exahash by mid-2023, with a focus on deploying the most energy-efficient mining fleet [34][37]. Other Important Information - The company withdrew 4,769 bitcoin from its investment fund, transferring them into direct company ownership, which will no longer be subject to mark-to-market accounting [24]. - The company entered into a $100 million term loan and refinanced its revolving credit facility, securing additional liquidity [25][26]. Q&A Session Summary Question: Update on rigs and energization timeline - Management confirmed that miners will be energized in increments and expects full energization of 68,000 miners by the end of September [45]. Question: Plans for severe downturns in the crypto market - The company has structured power agreements to allow for curtailment of mining operations if unprofitable, providing financial flexibility [47]. Question: Comparison with other miners - The company operates an asset-light model, providing flexibility and resilience compared to vertically integrated peers [50]. Question: Future potential of dividends - Management indicated that dividends are not currently in the plan but may be considered in the future [54]. Question: Plans for additional shares and dilution - The company will continue to tap equity markets for growth, maintaining a focus on long-term capital structure [55]. Question: Mining other cryptocurrencies - The company remains focused solely on Bitcoin, with potential experimentation for learning purposes [56].