Mining companies Marathon Digital and Riot Platforms have announced their 2024 Q2 financial reports in the past two days. Neither of them met the revenue and loss standards expected by Wall Street analysts, causing their respective stock prices to fall by about 7% to 8%.
Marathon Digital
Revenue fell short of expectations for two consecutive quarters
The report first pointed out that even though revenue in the second quarter of this year increased by 78% compared with the same period last year, from US$81.75 million to US$145.1 million, it was still slightly lower than the US$157.8 million expected by analysts, which was still slightly lower than 9%.
It is reported that the company's first-quarter revenue also increased by 223% year-on-year to $165.2 million, but still fell short of the expected $193.9 million.
At the same time, Marathon's earnings per share (EPS) also plummeted to -0.72 from -0.07 in the same period last year, causing investors to lose confidence. After the company announced its financial report yesterday, MARA's stock price also fell by more than 7.78%.
In this regard, it is not difficult to see that the company almost always shows a loss in operating profits and losses, especially after recognizing cryptocurrency income at fair value, the loss on the book came to nearly 148,000 US dollars. Compared with the first quarter "Gains on digital assets”’s floating profit of US$488,000 can be said to be extremely volatile.
Change in fair value of digital assets: (147,999 ) 51% of this quarter’s Bitcoin production sold
In addition, Marathon's overall computing power increased by 78% from 17.7 EH/s in the second quarter of last year to a record high of 31.5 EH/s in the same period this year; while the output dropped sharply from 2,926 BTC to 2,058, a decrease of 30 %.
The company admitted in a statement that it had sold 51% of the BTC produced this season to cover operating costs.
CEO: Halving event has widespread impact
Marathon CEO Fred Thiel said:
During the second quarter of 2024, our BTC production capacity was impacted by the unexpected failure of equipment at the Ellendale site operated by Applied Digital, maintenance of power lines, increases in global hashrate, and the April halving event.
He added, “However, these problems have been resolved, and the computing power is expected to reach 50 EH/s by the end of the year.”
Riot Platforms
First quarterly loss since 2022
First, Riot reported its first quarterly net loss since 2022 in the second quarter of this year, at $84.44 million, with earnings per share (EPS) of -$0.32, above forecasts and above the -$0.16 in the same period last year.
Looking closer, the expansion of losses is more likely due to a significant decline in overall revenue. Second-quarter revenue fell 8.76% compared to the same period last year to $70.01 million, slightly lower than expected.
Another reason may also be the increase in selling and general administrative expenses, which increased by more than $41.35 million from $19.83 million in the second quarter of last year to $61.18 million in the current period.
Selling, general, and administrative: 61,189 Computing power doubled, output dropped sharply
Then, Riot announced that due to the fermentation of the halving event, Riot's mining output dropped 52% from 1,775 BTC in the same period last year to 844; and the cost of Bitcoin mining this quarter has also increased as a result. 340%, an increase from US$5,734 in the same period last year to US$25,327.
Despite this, the company's Bitcoin mining revenue was $55.8 million, a 12% increase compared to $49.7 million in the same period last year, benefiting from the rapid rise in Bitcoin prices.
In addition, the company's strategic acquisition strategy has gradually worked. The computing power of the equipment in operation has almost doubled to 22 EH/s, and it is expected to reach the target of 36.3 EH/s by the end of 2024.
Actively acquire other miners
Riot CEO Jason Les said that the recently acquired Block Mining has more than 60 megawatts of generating capacity and will be operational immediately:
By the end of 2025, the power generation capacity will grow to more than 300 megawatts; and by the end of 2027, we will achieve our ambitious computing power goal of 100 EH/s.
However, such a statement does not seem to be buying into investors, with Riot shares falling 8.54% today following the release of the second-quarter report. Year-to-date, the company's shares have fallen nearly 39.75%.
Previously, the company also continued to express a tough attitude towards the acquisition of miner Bitfarms. It attempted to acquire Bitfarms for US$950 million but failed and is still in negotiations.
This article Mining company financial report: Marathon and Riot revenue fell short of expectations, and stock prices fell more than 8% in a single day. It first appeared on Lian News ABMedia.
