Bitcoin Miner Marathon Digital Beats Q3 Earnings Estimates, but Misses on Revenue
Marathon Digital, one of the leading bitcoin miners in North America, has exceeded Q3 earnings estimates but fell short in terms of revenue expectations. The company reported earnings of $0.35 per share, surpassing the estimated loss of $0.11 per share. However, Q3 revenue amounted to $97.8 million, slightly below the projected $99.6 million. Despite this, Marathon Digital remains confident in its future performance, with plans to increase its bitcoin mining power by 30% in 2024 and become the largest publicly traded mining company in terms of hash rate. It produced 3,490 bitcoins during the third quarter and sold 66% of them to cover operating costs. Although the company’s stock was slightly lower during the regular session, it has seen significant growth this year, outperforming the increase in bitcoin’s price.
Bitcoin Miner Marathon Digital Beats Q3 Earnings Estimates, but Misses on Revenue
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Overview of the Article
In this article, we will discuss the recent earnings results of bitcoin miner Marathon Digital. The company beat earnings estimates for the third quarter but fell short on revenue. We will also explore Marathon Digital’s bitcoin mining power guidance, compare it with its competitors, and analyze its stock performance.
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Key Takeaways
- Marathon Digital, one of the largest bitcoin miners in North America, reported third-quarter earnings that exceeded analysts’ expectations.
- However, the company missed revenue estimates for the same period.
- Marathon Digital produced a higher number of bitcoins in Q3 compared to the previous quarter and the same period last year.
- The company forecasts its bitcoin mining power to reach 26 exahashes per second (EH/s) in 2023, making it the largest publicly traded mining company in terms of hash rate.
- Marathon Digital’s stock performance has seen significant gains this year, outpacing the price increase of bitcoin.
Background Information
Bitcoin mining is the process by which new bitcoins are created and transactions are verified and added to the blockchain. Marathon Digital is a prominent player in the bitcoin mining industry, specializing in the production of bitcoins through powerful computer systems and specialized hardware. As the price of bitcoin has surged in recent years, bitcoin mining has become a lucrative business. Marathon Digital aims to capitalize on this growing industry and maximize its profitability.
Earnings Beat and Revenue Miss
Marathon Digital surpassed earnings estimates for the third quarter, reporting earnings of $0.35 per share compared to an estimated loss of $0.11 per share. This positive performance can be attributed to various factors, including the increased production and sale of bitcoins during the quarter.
However, the company fell short on revenue expectations, recording $97.8 million in revenue against an estimated $99.6 million. Despite missing revenue targets, Marathon Digital’s strong earnings indicate its ability to efficiently manage costs and generate profits.
Bitcoin Mining Power Guidance
Marathon Digital provided guidance for its bitcoin mining power, or hash rate, for the year 2023. The company expects its hash rate to reach 26 exahashes per second (EH/s) by the end of the year, which would solidify its position as the largest publicly traded mining company in terms of hash rate.
Increasing the hash rate is crucial for bitcoin miners as it directly affects the number of bitcoins they can mine and their overall profitability. Marathon Digital’s projected hash rate growth of approximately 30% in 2024 demonstrates its commitment to expanding its mining operations and taking advantage of the increasing demand for bitcoin.
Comparison with Competitors
Marathon Digital faces competition from other bitcoin mining firms, and it is essential to assess its performance relative to its peers. The closest competitor to Marathon Digital is Core Scientific, a miner that is expected to emerge from bankruptcy in the fourth quarter. Core Scientific currently has approximately 22 EH/s of mining power, making it a formidable player in the industry.
By aiming to achieve a hash rate of 26 EH/s in 2023, Marathon Digital will surpass Core Scientific and become the largest publicly traded mining company in terms of hash rate. This achievement would solidify Marathon Digital’s position as a leading player in the bitcoin mining industry.
Stock Performance
Despite the recent revenue miss, Marathon Digital’s stock performance has been impressive. The company’s stock has risen nearly 140% this year, outperforming the 73% price increase of bitcoin. This strong stock performance reflects investor confidence in Marathon Digital’s ability to generate profits and capitalize on the growing bitcoin market.
Marathon Digital’s stock experienced a minor decline of 6.9% during the regular trading session on Wednesday. However, it rebounded slightly with a 0.8% increase in after-hours trading. Investors will continue to monitor the company’s performance and growth potential in the coming months.
Conclusion
Marathon Digital’s third-quarter earnings results indicate its ability to outperform expectations and generate profits in the competitive bitcoin mining industry. Despite falling short on revenue, the company’s strong earnings demonstrate effective cost management and efficient mining operations.
Looking ahead, Marathon Digital’s projected hash rate growth and its aim to become the largest publicly traded mining company in terms of hash rate position it for further success. Additionally, the company’s impressive stock performance this year reflects investor confidence in its ability to navigate the volatile cryptocurrency market.
Disclosure
This article contains a disclosure stating that certain CoinDesk employees, including editorial staff, may receive exposure to DCG equity in the form of stock appreciation rights. This information is important for readers to understand the potential biases and conflicts of interest that may exist.
About the Author
The article is written by Aoyon Ashraf, a managing editor with over a decade of experience in covering equity markets. Ashraf brings a wealth of knowledge and expertise to the article, ensuring accurate and insightful information for readers.
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