Fourth Quarter and Fiscal Year 2021 Financial Highlights
- Q4 2021 revenue increased 2,180% year-over-year to
$60.3 million from$2.6 million in Q4 2020 - Fiscal year 2021 revenue increased 3,353% year-over-year to
$150.5 million from$4.4 million in fiscal year 2020 - Produced 1,098 self-mined bitcoin during Q4 2021, an 599% increase from Q4 2020
- Produced 3,197 self-mined bitcoin in fiscal year 2021, an 846% increase year-over-year
- Marathon’s investment fund, which purchased 4,813 BTC for approximately
$150 million inJanuary 2021 , increased in fair value by$73.8 million during fiscal year 2021 - Non-GAAP income from operations* was
$118.7 million for fiscal year 2021 - Non-GAAP net income** was
$168.7 million , or$1.70 per diluted share, for fiscal year 2021 - As of
December 31, 2021 , cash and cash equivalents was$268.5 million and total liquidity, defined as cash and bitcoin holdings, was approximately$615.5 million - Obtained a
$100 million revolving line of credit, secured by bitcoin and USD, withSilvergate Bank - Successfully raised
$747.5 million in a convertible note offering in which the notes are unsecured and the coupon rate is 1%
* Non-GAAP income from operations excludes the impact of depreciation and amortization of fixed assets, impairment losses on mined cryptocurrency, server maintenance contract amortization, and stock compensation expense. This metric does not include the change in fair value of the Company’s investment fund, which purchased 4,813 BTC for approximately$150 million inJanuary 2021 .
** Non-GAAP net income excludes the impact of depreciation and amortization of fixed assets, impairment losses on mined cryptocurrency, server maintenance contract amortization, and stock compensation expense. This metric includes the change in fair value of the Company’s investment fund, which purchased 4,813 BTC for approximately$150 million inJanuary 2021 .
Fiscal Year 2021 and Recent Bitcoin Mining Highlights
- Increased hash rate 1,790% during fiscal year 2021 with the total number of miners deployed increasing to 32,150 miners, which could generate approximately 3.5 EH/s, as of
December 31, 2021 - As of
December 31, 2021 , held approximately 8,133 bitcoin, each of which had a market price of approximately$46,208 ; as a result, the approximate fair market value of Marathon’s bitcoin held as digital currencies was approximately$375.8 million - As of
February 28, 2022 , held approximately 8,956 bitcoin, of which 4,813 are held in an investment fund of one while the other 4,143 were generated by the Company’s operations (*unaudited)
Fourth Quarter and Recent Corporate Highlights
- Purchased a record number of ANTMINER S19 XP (140 TH/s) bitcoin miners from BITMAIN, increasing Marathon’s total mining fleet to approximately 199,000 bitcoin miners producing approximately 23.3 EH/s by early 2023
- Expanded agreement with Compute North to host more than 100,000 of Marathon’s bitcoin miners, predominantly behind the meter at wind and solar farms operated by one of the largest renewable energy providers in
North America - Enhanced leadership team with the appointments of
Ashu Swami to chief technology officer,Raymond Walintukan to VP of mining operations, andAdam Swick to VP of strategy - As part of strategic succession plan, CEO
Fred Thiel succeededMerrick Okamoto as chairman of the board and now maintains responsibilities of both chairman and CEO - Fully completed miner installations at the Company’s facility in
Hardin, MT , and began deploying miners at new facilities hosted by Compute North - Marathon added to the Forbes Blockchain 50 2022
Management Commentary
“In 2021, we increased our bitcoin production 846% year-over-year to 3,197 self-mined BTC as we expanded our mining operations and grew our hash rate 1,790% from
“Our primary objectives for 2022 are to effectively deploy our miners, achieve our growth targets, and continue expanding our competitive moat. Deploying at scale behind the meter involves breaking some new ground, and now that we have overcome some of those initial hurdles, we expect deployments to accelerate this quarter and throughout the rest of the year. We believe Marathon remains well positioned to generate approximately 23.3 Eh/s and for our mining operations to be 100% carbon neutral by early 2023. We look forward to another strong year for Marathon as we continue our mission of supporting the adoption, security, and evolution of Bitcoin by building one of the largest, most agile, and most sustainably operated Bitcoin mining operations in the world.”
Marathon’s CFO,
Fourth Quarter 2021 Financial Results
Revenue increased to
Income from operations was
Non-GAAP income from operations was
Net income in the fourth quarter of 2021 totaled
Non-GAAP net income in the fourth quarter of 2021 totaled
The Company generated 1,098 self-mined bitcoin in the fourth quarter of 2021, a 599% increase from 157 self-mined bitcoin in the fourth quarter of 2020.
Fiscal Year 2021 Financial Results
Total revenue increased 3,353% to
Loss from operations was
Non-GAAP income from operations was
The Company’s investment fund increased in fair value by
Net loss in 2021 totaled
Non-GAAP net income in 2021 totaled
The Company generated 3,197 self-mined bitcoin in fiscal year 2021, an 846% increase year-over-year from 338 self-mined bitcoin in 2020. The Company last sold bitcoin on
Marathon’s Digital Assets
As of
As of
As of
Investor Notice
Investing in our securities involves a high degree of risk. Before making an investment decision, you should carefully consider the risks, uncertainties and forward-looking statements described under "Risk Factors" in Item 1A of our most recent Annual Report on Form 10-K for the fiscal year ended
Forward-Looking Statements
Statements made in this press release include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements can be identified by the use of words such as “may,” “will,” “plan,” “should,” “expect,” “anticipate,” “estimate,” “continue,” or comparable terminology. Such forward-looking statements are inherently subject to certain risks, trends and uncertainties, many of which the Company cannot predict with accuracy and some of which the Company might not even anticipate and involve factors that may cause actual results to differ materially from those projected or suggested. Readers are cautioned not to place undue reliance on these forward-looking statements and are advised to consider the factors listed above together with the additional factors under the heading “Risk Factors” in the Company's Annual Reports on Form 10-K, as may be supplemented or amended by the Company's Quarterly Reports on Form 10-Q. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events, new information or otherwise.
About
Marathon is a digital asset technology company that mines cryptocurrencies with a focus on the blockchain ecosystem and the generation of digital assets.
Marathon Digital Holdings Company Contact:
Telephone: 800-804-1690
Email: charlie@marathondh.com
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
2021 | 2020 | ||||||
(Unaudited) | ((Unaudited)) | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 268,522,019 | $ | 141,322,776 | |||
Digital currencies | 102,805,980 | 2,271,656 | |||||
Digital currencies, restricted | 20,437,284 | - | |||||
Other receivable | - | 74,767,226 | |||||
Deposit | 34,458,347 | 65,647,592 | |||||
Investment fund | 223,778,545 | - | |||||
Loan receivable | 30,000,000 | - | |||||
Prepaid expenses and other current assets | 8,148,016 | 2,399,965 | |||||
Total current assets | 688,150,191 | 286,409,215 | |||||
Other assets: | |||||||
Property and equipment, net of accumulated depreciation and impairment charges of | 276,242,794 | 17,224,321 | |||||
Prepaid service contract | 13,665,589 | 8,415,000 | |||||
Right-of-use assets | - | 200,301 | |||||
Advance to vendor | 466,254,623 | - | |||||
Investment in SAFE Agreements | 3,000,000 | - | |||||
Intangible assets, net of accumulated amortization of | 931,226 | 1,002,402 | |||||
Total other assets | 760,094,232 | 26,842,024 | |||||
TOTAL ASSETS | $ | 1,448,244,423 | $ | 313,251,239 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | 12,927,139 | $ | 999,742 | |||
Current portion of accrued bond interest | 867,260 | - | |||||
Current portion of lease liability | - | 121,596 | |||||
Warrant liability | - | 322,437 | |||||
Total current liabilities | 13,794,399 | 1,443,775 | |||||
Long-term liabilities | |||||||
Convertible notes payable | 728,405,922 | - | |||||
SBA PPP loan payable | - | 62,500 | |||||
Deferred tax liabilities | 23,020,721 | - | |||||
Total long-term liabilities | 751,426,643 | 62,500 | |||||
Total liabilities | 765,221,042 | 1,506,275 | |||||
Commitments and Contingencies | |||||||
Stockholders' Equity: | |||||||
Preferred stock, 0.0001 par value, 50,000,000 shares authorized, no shares issued and outstanding at | - | - | |||||
Common stock, 0.0001 par value; 200,000,000 shares authorized; 102,733,273 and 81,974,619 issued and outstanding at | 10,273 | 8,197 | |||||
Additional paid-in capital | 835,693,610 | 428,242,763 | |||||
Accumulated other comprehensive loss | (450,719 | ) | (450,719 | ) | |||
Accumulated deficit | (152,229,783 | ) | (116,055,277 | ) | |||
Total stockholders’ equity | 683,023,381 | 311,744,964 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,448,244,423 | $ | 313,251,239 | |||
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
For the Three Months Ended | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Revenues | ||||||||||||
Cryptocurrency mining revenue | $ | 60,281,615 | $ | 2,643,611 | $ | 277,051 | ||||||
Total revenues | 60,281,615 | 2,643,611 | 277,051 | |||||||||
Operating costs and expenses | ||||||||||||
Cost of revenue | 14,032,845 | 3,471,357 | 940,479 | |||||||||
Impairment of mining equipment | - | 871,302 | 55,663 | |||||||||
Compensation and related taxes | 10,615,657 | 2,741,276 | 250,551 | |||||||||
Consulting fees | 153,417 | 57,000 | 46,812 | |||||||||
Professional fees | 1,936,758 | 218,179 | 135,053 | |||||||||
General and administrative | 829,925 | 237,967 | 105,664 | |||||||||
Impairment of mined cryptocurrency | 11,080,241 | - | - | |||||||||
Total operating expenses | 38,648,843 | 7,597,081 | 1,534,223 | |||||||||
Income (loss) from operations | 21,632,772 | (4,953,470 | ) | (1,257,172 | ) | |||||||
Other income (expenses) | ||||||||||||
Other income | 15,874 | - | - | |||||||||
Loss on conversion of note | - | - | (447,701 | ) | ||||||||
Change in fair value of investment in NYDIG fund | 15,013,271 | - | - | |||||||||
Realized gain (loss) on sale of digital currencies | 5,088 | - | 22,884 | |||||||||
Change in fair value of warrant liability | (821,061 | ) | (290,938 | ) | 33,987 | |||||||
Change in fair value of mining payable | - | - | 507,863 | |||||||||
Interest income | 267,754 | 13,497 | 2,849 | |||||||||
Interest expense | (1,567,038 | ) | (916 | ) | (14,552 | ) | ||||||
Total other (expenses) income | 12,913,888 | (278,357 | ) | 105,330 | ||||||||
Loss before income taxes | $ | 34,546,660 | $ | (5,231,827 | ) | $ | (1,151,843 | ) | ||||
Provision for income taxes | (23,020,721 | ) | (2,400 | ) | - | |||||||
Net loss | $ | 11,525,939 | $ | (5,234,227 | ) | $ | (1,151,843 | ) | ||||
Net income (loss) per share, basic: | $ | 0.11 | $ | (0.10 | ) | $ | (0.17 | ) | ||||
Net income (loss) per share, diluted: | $ | 0.10 | $ | (0.10 | ) | $ | (0.17 | ) | ||||
Weighted average shares outstanding, basic: | 102,620,749 | 53,013,453 | 6,664,238 | |||||||||
Weighted average shares outstanding, diluted: | 113,402,577 | 53,013,453 | 6,664,238 | |||||||||
For the Years Ended | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Revenues | ||||||||||||
Cryptocurrency mining revenue | $ | 150,463,770 | $ | 4,357,443 | $ | 1,185,227 | ||||||
Total revenues | 150,463,770 | 4,357,443 | 1,185,227 | |||||||||
Operating costs and expenses | ||||||||||||
Cost of revenue | 33,696,103 | 7,001,128 | 2,482,181 | |||||||||
Impairment of mining equipment | - | 871,302 | - | |||||||||
Impairment of leasehold improvements | - | - | 447,776 | |||||||||
Compensation and related taxes | 164,285,755 | 4,730,143 | 1,475,450 | |||||||||
Consulting fees | 531,677 | 302,561 | 130,813 | |||||||||
Professional fees | 5,268,485 | 733,741 | 422,335 | |||||||||
General and administrative | 2,216,489 | 551,672 | 465,783 | |||||||||
Impairment of mined cryptocurrency | 29,552,991 | - | - | |||||||||
Total operating expenses | 235,551,500 | 14,190,547 | 5,424,338 | |||||||||
Income (loss) from operations | (85,087,730 | ) | (9,833,104 | ) | (4,239,111 | ) | ||||||
Other income (expenses) | ||||||||||||
Gain from extinguishment of debt | - | - | 181,995 | |||||||||
Other income (expenses) | 81,827 | 115,876 | - | |||||||||
Foreign exchange loss | - | - | (11,873 | ) | ||||||||
Loss on conversion of note | - | (364,833 | ) | - | ||||||||
Change in fair value of investment in NYDIG fund | 73,778,545 | - | - | |||||||||
Realized gain (loss) on sale of digital currencies | 14,175 | 15,466 | 36,092 | |||||||||
Change in fair value of warrant liability | (1,048,286 | ) | (309,588 | ) | 26,234 | |||||||
Change in fair value of mining payable | - | (66,547 | ) | 507,862 | ||||||||
Interest income | 677,415 | 18,343 | 33,651 | |||||||||
Interest expense | (1,569,731 | ) | (20,984 | ) | (51,915 | ) | ||||||
Total other (expenses) income | 71,933,945 | (612,267 | ) | 722,046 | ||||||||
Loss before income taxes | $ | (13,153,785 | ) | $ | (10,445,371 | ) | $ | (3,517,065 | ) | |||
Provision for income taxes | (23,020,721 | ) | (2,400 | ) | - | |||||||
Net loss | $ | (36,174,506 | ) | $ | (10,447,771 | ) | $ | (3,517,065 | ) | |||
Net income (loss) per share, basic and diluted: | $ | (0.36 | ) | $ | (0.13 | ) | $ | (0.53 | ) | |||
Weighted average shares outstanding, basic and diluted: | 99,337,587 | 81,408,340 | 6,664,238 | |||||||||
Reconciliation of GAAP and Non-GAAP Financial Information (Unaudited)
Non-GAAP Financial Measures
We are providing supplemental financial measures for (i) non-GAAP income from operations that excludes the impact of depreciation and amortization of fixed assets, impairment losses on mined cryptocurrency, server maintenance contract amortization and stock compensation expense and (ii) non-GAAP net income and non-GAAP diluted earnings per share that exclude the impact of depreciation and amortization of fixed assets, impairment losses on mined cryptocurrency, change in fair value of warrant liability, server maintenance contract amortization and stock compensation expense, net of withholding taxes. These supplemental financial measures are not measurements of financial performance under generally accepted accounting principles in
We believe that these non-GAAP financial measures are also useful to investors and analysts in comparing our performance across reporting periods on a consistent basis. The first supplemental financial measure excludes non-cash operational expenses that we believe are not reflective of our general business performance such as (i) depreciation and amortization of fixed assets, (ii) significant impairment losses on mined cryptocurrency, (iii) server maintenance contract amortization and (iv) stock compensation expense, net of withholding taxes that could vary significantly in comparison to other companies.
The second set of supplemental financial measures excludes the impact of (i) depreciation and amortization of fixed assets, (ii) significant impairment losses on mined cryptocurrency, (iii) change in fair value of warrant liability (iv) server maintenance contract amortization and (v) stock compensation expense, net of withholding taxes. We believe the use of these non-GAAP financial measures can also facilitate comparison of our operating results to those of our competitors.
Non-GAAP financial measures are subject to material limitations as they are not in accordance with, or a substitute for, measurements prepared in accordance with GAAP. For example, we expect that share-based compensation expense, which is excluded from the first two non-GAAP financial measures, will continue to be a significant recurring expense over the coming years and is an important part of the compensation provided to certain employees, officers, and directors. Similarly, we expect that depreciation and amortization of fixed assets will continue to be a recurring expense over the term of the useful life of the assets. We have also excluded impairment losses on mined cryptocurrency from the first two non-GAAP financial measures, which may occur in future periods as a result of our continued holdings of significant amounts of bitcoin. Our non-GAAP financial measures are not meant to be considered in isolation and should be read only in conjunction with our Consolidated Condensed Financial Statements, which have been prepared in accordance with GAAP. We rely primarily on such Consolidated Condensed Financial Statements to understand, manage, and evaluate our business performance and use the non-GAAP financial measures only supplementally.
The following is a reconciliation of our non-GAAP income from operations for the three months and year ending
For the Three Months Ended | |||||||||||
2021 | 2020 | 2019 | |||||||||
Reconciliation of non-GAAP income from operations: | |||||||||||
Income (loss) from Operations | $ | 21,632,771 | $ | (4,953,470 | ) | $ | (1,257,172 | ) | |||
Depreciation and Amortization of Fixed Assets | 6,888,201 | 1,212,871 | 529,015 | ||||||||
Impairment of mined cryptocurrency | 11,080,241 | - | - | ||||||||
Server maintenance contract amortization | 1,207,647 | 968,712 | - | ||||||||
Stock Compensation Expense, net of withholding taxes | 8,425,074 | 180,532 | 270,885 | ||||||||
Non-GAAP income (loss) from operations | $ | 49,233,935 | $ | (2,591,355 | ) | $ | (457,272 | ) | |||
For the Years Ended | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Reconciliation of non-GAAP income from operations: | ||||||||||||
Income (loss) from Operations | $ | (85,087,730 | ) | $ | (9,833,104 | ) | $ | (4,239,111 | ) | |||
Depreciation and Amortization of Fixed Assets | 14,904,002 | 3,064,212 | 994,481 | |||||||||
Impairment of mined cryptocurrency | 29,552,991 | - | - | |||||||||
Server maintenance contract amortization | 3,278,927 | 976,842 | - | |||||||||
Stock Compensation Expense, net of withholding taxes | 156,071,895 | 1,129,300 | 330,749 | |||||||||
Non-GAAP income (loss) from operations | $ | 118,720,085 | $ | (4,662,750 | ) | $ | (2,913,881 | ) | ||||
The following are reconciliations of our non-GAAP net income and non-GAAP diluted earnings per share for the three months and year ending
For the Three Months Ended | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Reconciliation of non-GAAP net income: | ||||||||||||
Net (loss) income | $ | 11,525,939 | $ | (5,234,227 | ) | $ | (1,151,843 | ) | ||||
Non-cash adjustments to Net Income (loss) | ||||||||||||
Depreciation and Amortization of Fixed Assets | 6,888,201 | 1,212,871 | 529,015 | |||||||||
Impairment of mined cryptocurrency | 11,080,241 | - | - | |||||||||
Change in fair value of warrant liability | 821,061 | 290,938 | (33,987 | ) | ||||||||
Server maintenance contract amortization | 1,207,647 | 968,712 | - | |||||||||
Stock Compensation Expense, net of withholding taxes | 8,425,074 | 180,532 | 270,885 | |||||||||
Total Non-cash adjustments to Net Income (Loss) | $ | 28,422,224 | $ | 2,653,053 | $ | 765,913 | ||||||
Non-GAAP net (loss) income | $ | 39,948,163 | $ | (2,581,173 | ) | $ | (385,930 | ) | ||||
Reconciliation of non-GAAP diluted earnings (loss) per share: | ||||||||||||
Diluted (loss) earnings per share | $ | 0.11 | $ | (0.10 | ) | $ | (0.17 | ) | ||||
Depreciation and Amortization of Fixed Assets (per diluted share) | 0.06 | 0.02 | 0.08 | |||||||||
Impairment of mined cryptocurrency (per diluted share) | 0.10 | - | - | |||||||||
Change in fair value of warrant liability (per diluted share) | 0.01 | 0.01 | (0.01 | ) | ||||||||
Server maintenance contract amortization (per diluted share) | 0.01 | 0.02 | - | |||||||||
Stock Compensation Expense, net of withholding taxes (per diluted share) | 0.07 | - | 0.04 | |||||||||
Non-GAAP diluted earnings (loss) per share | $ | 0.36 | $ | (0.05 | ) | $ | (0.06 | ) | ||||
For the Twelve Months Ended | |||||||||||||||
| |||||||||||||||
2021 | 2020 | 2019 | |||||||||||||
Reconciliation of non-GAAP net income: | |||||||||||||||
Net (loss) income | $ | (36,174,506 | ) | $ | (10,447,771 | ) | $ | (3,699,060 | ) | ||||||
Non-cash adjustments to Net Income (loss) | |||||||||||||||
Depreciation and Amortization of Fixed Assets | 14,904,002 | 3,064,212 | 994,481 | ||||||||||||
Impairment of mined cryptocurrency | 29,552,991 | - | - | ||||||||||||
Change in fair value of warrant liability | 1,048,286 | 309,588 | (26,234 | ) | |||||||||||
Server maintenance contract amortization | 3,278,927 | 976,842 | - | ||||||||||||
Stock Compensation Expense, net of withholding taxes | 156,071,895 | 1,129,300 | 330,749 | ||||||||||||
Total Non-cash adjustments to Net Income (Loss) | $ | 204,856,101 | $ | 5,479,943 | $ | 1,298,996 | |||||||||
Non-GAAP net (loss) income | $ | 168,681,595 | $ | (4,967,828 | ) | $ | (2,400,064 | ) | |||||||
Reconciliation of non-GAAP diluted earnings (loss) per share: | |||||||||||||||
Diluted (loss) earnings per share | $ | (0.36 | ) | $ | (0.13 | ) | $ | (0.53 | ) | ||||||
Depreciation and Amortization of Fixed Assets (per diluted share) | 0.15 | 0.04 | 0.15 | ||||||||||||
Impairment of mined cryptocurrency (per diluted share) | 0.30 | - | - | ||||||||||||
Change in fair value of warrant liability (per diluted share) | 0.01 | - | - | ||||||||||||
Server maintenance contract amortization (per diluted share) | 0.03 | 0.01 | - | ||||||||||||
Stock Compensation Expense, net of withholding taxes (per diluted share) | 1.57 | 0.01 | 0.05 | ||||||||||||
Non-GAAP diluted earnings (loss) per share | $ | 1.70 | $ | (0.07 | ) | $ | (0.33 | ) | |||||||
Source:
2022 GlobeNewswire, Inc., source