Originally published on: August 02, 2024
Marathon Digital, a US-listed Bitcoin mining company, experienced an 8% drop in its stock value after revealing its second-quarter earnings that failed to meet the expectations set by Wall Street analysts.
Q2 Revenue Falls Short of Projections
In the second quarter, Marathon reported a total revenue of $145.1 million, missing analysts’ expectations by approximately 9%, as they had forecasted a revenue of $157.9 million. Despite this shortfall, the company saw a significant year-on-year revenue surge of 78%, up from $81.7 million in the same quarter of the previous year.
The Impact on Stock Prices
Following the release of the earnings report, shares of Marathon Digital (MARA) plummeted by 7.78%, closing the trading day at $18.14, according to data from Google Finance.
Challenges Faced by Bitcoin Miners
During the quarter, Bitcoin miners faced challenges due to escalating operational costs following the Bitcoin halving in April. Marathon Digital had to sell 51% of its Bitcoin holdings to cover its operational expenses. The company highlighted that its average price of mined Bitcoin in Q2 2024 was 136% higher than the previous year, despite mining an average of 22.9 Bitcoins per day, a decrease of 9.3 Bitcoins compared to the previous period.
Consistent Misses on Estimates
This marks the second consecutive quarter that Marathon Digital has fallen short of consensus estimates, having previously missed Q1 projections as well. In Q1, the company’s revenues grew by 223% year-on-year to $165.2 million, but still failed to meet the $193.9 million estimate from investment analysts by 14.80%.
Comparison with Competitors
In comparison, rival crypto miner Riot Platforms reported $70 million in revenue for Q2 2024, an 8.8% decrease from the previous year. Despite the decline, Riot’s revenue was much closer to consensus estimates, just 0.63% lower than the prediction from investment analyst firm Zacks.
Market Response
Riot’s stock (RIOT) closed the trading day with an 8.54% decrease, ending at $9.32.
Stay Informed, Make Informed Decisions
This article serves to provide information and does not offer investment advice. Readers are advised to conduct their own research and due diligence before making any investment decisions.
