Navigating Losses Amid Operational Growth

Revenue: Increased 30% to $213.9 million from $165.2 million in Q1 2024.
Net Loss: Reported a net loss of $533.4 million or negative $1.55 per diluted share, compared to a net income of $337.2 million or $1.26 per diluted share in Q1 2024.
Adjusted EBITDA: Decreased to a loss of $483.6 million from $542.1 million in Q1 2024.
Bitcoin Holdings: Over 48,000 Bitcoin held on the balance sheet.
Bitcoin Price Impact: Unrealized fair market value loss of $510.2 million due to a 12% lower Bitcoin price as of March 31, 2025, compared to December 31, 2024.
Purchase Energy Cost per Bitcoin: $35,728 per coin and $0.04 per kilowatt hour.
Cost of Revenue per Petahash per Day: Declined 10% sequentially, excluding depreciation.
Energized Hash Rate: Increased 95% to 54.3 exahash per second from 27.8 exahash per second in Q1 2024.
Operational Capacity: Transformed from 0% owned and operated capacity to approximately 70% since the beginning of 2024.

Release Date: May 08, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

MARA Holdings Inc (NASDAQ:MARA) delivered strong operational metrics in Q1, with a 25% year-over-year improvement in daily cost per petahash.
The company completed construction of a fully owned 200-megawatt data center in Ohio, with 100 megawatts now online.
MARA is transforming into a vertically integrated digital energy and infrastructure company, focusing on long-term, low-cost energy solutions.
The company is investing in digital energy technologies and has begun manufacturing custom miners, providing unique cost and performance advantages.
MARA’s strategic growth includes discussions with governments and global energy corporations to achieve lower energy costs and greater CapEx efficiency.

MARA reported a net loss of $533.4 million in Q1 2025, compared to a net income of $337.2 million in the first quarter of the previous year.
The average price of Bitcoin declined significantly in Q1, impacting MARA’s production and resulting in an unrealized fair market value loss of $510.2 million.
Despite operational improvements, MARA’s stock price is down 15% year-to-date, reflecting a disconnect between market sentiment and company fundamentals.
The company faces challenges from rising global hash rates and increased network difficulty, which have impacted Bitcoin production.
MARA’s adjusted EBITDA decreased to a loss of $483.6 million in Q1 2025 from $542.1 million in Q1 of 2024.

Q: Can you elaborate on the market disconnect between MARA’s fundamentals and share performance, and why Bitcoin is behaving less like a risk asset? A: Frederick Thiel, Chairman and CEO, explained that the market values MARA for its Bitcoin holdings but not for its mining operations. He noted that other companies without Bitcoin holdings are valued for their mining operations. Thiel believes Bitcoin is increasingly seen as a strategic reserve by states and institutions, which will drive its price up, indicating a shift from previous market cycles.

Q: What types of off-grid sites is MARA prioritizing for future growth, and what are the details of your public-private partnerships? A: Frederick Thiel stated that MARA is focusing on partnerships with energy companies to monetize underutilized energy. The company is exploring a mix of thermal, wind, solar, and flare gas energy sources. Thiel emphasized the importance of flexible load solutions to support AI data centers and noted ongoing discussions with major energy companies globally.

Q: How do you expect your off-grid power capacity expansion to impact your cash cost position over the next three years? A: Salman Manon, CFO, highlighted that MARA has been reducing cash costs through capital and operational efficiencies. The company expects further cost reductions by sourcing low-cost megawatts and leveraging its own energy generation projects, such as the 114-megawatt wind farm in Texas, which helps decongest the grid and reduce electricity costs.

Q: Can you address concerns about trade-offs like reduced rig uptime and higher operational expenses in off-grid mining? A: Frederick Thiel explained that off-grid mining sites, such as wind farms and flare gas operations, offer low-cost energy and high profitability. The company is focusing on intermittent operations that align with energy company demands, which can be more profitable despite lower uptime. Salman Manon added that the IRR for these projects is expected to be significantly higher than traditional models.

Q: What are the early market feedback and revenue opportunities from your 30-megawatt immersion pilot project for AI data centers? A: Frederick Thiel noted that the immersion pilot project has shown the ability to overclock systems, reducing the number of miners needed and saving on CapEx. The company is developing liquid cold plate technology for AI applications, which offers environmental benefits and cost savings. MARA is partnering with compute OEMs to deploy pilots and explore broader solutions for the AI market.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

Source link