The US-listed Bitcoin mining company Marathon Digital saw its shares drop by 8% after reporting second-quarter earnings that fell short of Wall Street expectations. Marathon reported $145.1 million in revenue for the second quarter, which is about 9% lower than the $157.9 million analysts had predicted, according to Yahoo Finance data. This shortfall occurred despite a 78% year-over-year revenue increase from $81.7 million in Q2 2023, as stated in the earnings report published on August 1.
What is Happening at Marathon Digital?
According to Google Finance data, MARA’s stock price fell by 7.78% following the report’s release, closing the trading day at $18.14. Marathon Digital announced that it sold 51% of its Bitcoin to cover operational expenses, as Bitcoin miners faced challenges throughout the quarter due to increased operational costs following the Bitcoin halving process in April.
The report highlighted that the average price of Bitcoin mined by Marathon in the second quarter of 2024 was 136% higher than the same period the previous year. Marathon mined an average of 22.9 Bitcoins per day, which is 9.3 Bitcoins less per day compared to the previous period.
This marked the second consecutive quarter that Marathon missed consensus estimates, as it also missed first-quarter estimates. At that time, Marathon’s first-quarter revenues increased by 223% year-over-year to $165.2 million, but fell short of investment analyst firm Zacks’ estimate of $193.9 million by 14.80%, according to results shared on May 9.
Details on the Matter
On July 23, news surfaced that Marathon was fined $138 million after being found guilty of violating a confidentiality or non-fraud agreement. Meanwhile, rival crypto miner Riot Platforms reported $70 million in revenue for the second quarter of 2024, an 8.8% year-over-year decrease, according to the earnings report published on July 31.
Riot’s reported revenues were much closer to consensus estimates, being only 0.63% lower than Zacks’ forecast. Riot’s stock (RIOT) closed the trading day down 8.54% at $9.32. The mining sector, particularly after the halving process, saw significant gains in ecosystem operations, but the recent decline in interest in the Bitcoin ecosystem has led to a decrease in mining revenues.
