Release Date: August 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- MARA Holdings Inc (MARA, Financial) successfully acquired and closed the Garden City data center in Texas, enhancing their operational capacity.
- The company increased its 2024 hash rate target to 50 exahash, demonstrating a commitment to growth and expansion.
- MARA signed a significant partnership with the government of Kenya to develop underutilized energy assets, showcasing their focus on sustainable energy solutions.
- The launch of MARA's Kaspa mining operations has diversified revenue streams and achieved over 80% margins, contributing positively to financial performance.
- MARA's energy harvesting initiatives, such as the pilot heating project in Finland, highlight innovative approaches to utilizing digital asset compute for sustainable energy solutions.
Negative Points
- MARA reported a net loss of $200 million in the second quarter, significantly higher than the $9 million loss in the same period last year.
- Bitcoin production was impacted by unexpected equipment failures and transmission line maintenance, affecting operational efficiency.
- The company faced increased global hash rate and network difficulty, which, along with the April halving event, reduced bitcoin production.
- General and administrative expenses increased due to the growing scale of the business and acquisitions, impacting overall profitability.
- The volatility in bitcoin prices led to a significant loss on the fair market value of digital assets, affecting financial results.
Q & A Highlights
Q: Can you talk a little bit about your investment in Auradine and are you currently using any of their miners?
A: We've disclosed in the 10-Q orders and payments to Auradine for orders of machines. We believe the Auradine 3 nanometer miners, which will begin shipments towards the back half of this year and into next year, are amongst the best in the industry. They have received positive feedback and are considered a strong competitor to Bitmain.
Q: With the announcement of your 100% HODL strategy of mined bitcoin, how do you plan to fund continuing operations?
A: We have cash on the balance sheet and access to capital markets. Additionally, initiatives like Kaspa, which has high margins, and our technology businesses will result in additional cash flows. This strategy is not new to MARA, as we had a similar approach in 2021.
Q: You have a number of initiatives ongoing. When can we expect them to contribute to revenue and earnings?
A: We are focused on developing resilient businesses with long-term growth potential. Energy harvesting and technology businesses are expected to mine bitcoin at low costs and provide technology to other industries. These initiatives will contribute to revenue as they scale.
Q: Can you explain the operational issues faced in the last two quarters and their likelihood of recurrence?
A: The issues at the Ellendale site were mainly due to transformer failures and transmission line maintenance. Applied Digital has addressed these issues, and we have implemented strategies to prevent recurrence. We are working closely with hosting partners to mitigate such risks.
Q: How do you evaluate the economics of mining versus edge AI work?
A: We do not plan to operate AI inference at the edge but aim to provide infrastructure for it. Our immersion technology is designed for these areas, and we see opportunities to partner with industry leaders. We believe bitcoin mining can act as a load balancer for AI data centers.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
