Marathon Digital (MARA) 9 May 242024 Q1 Earnings call transcript

Good day, ladies and gentlemen. Welcome to Marathon Digital Holdings' First Quarter 2024 Earnings Webcast and Conference Call.I would now like to turn the call over to your host, Robert Samuels, Vice President of Investor Relations. Please go ahead.

Thank you, operator. Good afternoon, and welcome to Marathon Digital Holdings' first quarter 2024 earnings call. us call joining for you for today. our Thank like are and our session. prepared Chief me started, Financial on we Officer, remarks question-and-answer Chairman make call today's I'd get statements, we and With may Executive contain that and the our Fred additional Salman forward-looking Khan.Before remind during forward-looking to everyone Officer, that our Chief may Thiel; statements and uncertainties These and results to forward-looking statements materially. are may risks subject differ actual could, in enable, similar such intend, as Digital this potential, call, should, used they statement. Marathon anticipate, will, words When believe, estimate, the to a forward-looking as expect, project expressions Holdings and are relate earnings Please our release refer statements. a our full to recitation forward-looking of for actual results differ those that at time. by from cautioned this to Marathon forward-looking anticipated are risks all cause and involve materially Investors may statements uncertainties, which

some accounting operating accepted exclude items generally financial margin. with not kick the may that GAAP its to to remarks are States, unrelated and covering way, Form measures.As of and non-GAAP website and GAAP a be the these today's will of After believes in public questions Marathon's Exchange we for Some call, going the and from I'm financial were to certain the they off. non-GAAP are before Q&A of with in filings Commission, not transferring at financial with measures begin Securities measures accordance turn non-GAAP total their be note including popular that of adjusted things results. our through Marathon over Fred indicators important our will these prepared and refer most the to to measures to analysts.And Salman. performance our these United with because on its viewed to financial Please which EBITDA that XX-Q please comments, full www.sec.gov, principles U.S. and of reports with comparable live a risks out more going refer are described more Fred? ir.mara.com.Finally, certain from that and prepared Fred we'll investors periodic to XX-K fully in can to we usual, be call uncertainties company's reconciliation the today's on of and call performance indicative

Rob. you, Thank

The of sustainable first of quarter acquiring company X sites. of megawatts future.During of the less closed our than laid our transformative integrating X asset-light Bitcoin of from only negotiated, digital XXX one and that fully an Bitcoin our grew first and by X officially of the inclusive integrated owned sites. date. portfolio our At owned year, we operated. which asset consisted months, of and and build portfolio transitioned of the this asset we most our directly XXXX we end to globally a which We and operated on was last solid comprised organization of resilience initiated, compute first X% more diversified compute acquisitions being and mining capacity, In quarter, to leverages a a are into and foundation building miner we improved Marathon digital significantly

portfolio. farm. some first of being adjacent build growth site and near-term to which We the X XX Nebraska, for size gained the approximately we quickly XX% building shareholders The the effectively new savings sites paid to end and of capacity, Texas taking Garden is cost competitors $XXX,XXX QX, generating meet our respectively, X.X our half gained portfolio relative and City, of sites.In more megawatt, enough in Texas, the sites to competitors per $XXX,XXX what have, while a being approximately that we way by Kearney, our and far and have our exahash we of the year. of this our doubled of our in targets to capacity this ownership of by the for to operational the Granbury, the gigawatts direct did wind and significant assets second purchased of is these over operations We influence control direct

sophisticated to February, transparent, post-halving and As Bitcoin scale revenues Slipstream, provides creating it Bitcoin environment. submission launched that which is more by blockchain, operational we transactions. transform which in Bitcoin cost-effectively and digital and trusted to diversify is first designed each laid revenue an to users also and this provides accelerate to as and simple, our our to demonstrates to transactions we our transaction of an commitment organization, infrastructure that service technologies advanced particularly a streamline advantageous we large essence, a path expanding adhere influence, launched protocol means by the with complex our revenue non-standard Marathon our enhance increase capturing a streams.In products provided In and opportunity direct or which it Bitcoin's is fees, transaction with they services diversifying of of confirmations adding

the it time. fees which an halving, service nearly alone. earned before additional generating XX% FPPS MARA Slipstream, captured XX powers at is X pools a Bitcoin Although and another with few XX, old, we already month, Bitcoin valuable. fees X.XX the proven months just the in greater Pool, transaction Last block than only Slipstream with has from

Slipstream strategic serves While the are of deploying of production, and overall operating tangible of as mining our technology importance example our a proprietary stack. numbers being relative of pool these scale at our small to own

pool above to was that a in the March, for were beginning. demonstrated performed As Slipstream would look if mining and we mempool.space you past of just at the the week matter average.As see at look XX% you fact, Marathon's pools,

Empower of industry-leading Conference the and our market, key brought at XPIC. diversify contribute reception quarter, technology integrating first integrated and tens dollars We of the and have our already streams. controller of these to which overwhelmingly our first we tech and all products XPIC we which firmware, in improving is to of During X which products cost. revenue immersion to vertically uptime, our our sites, currently These opportunity our each optimize X-phase board and a part include provide to an growing. increasing downtime for is MARA advantages, paying some was our products call showcased with of competitive strategy our We're also us reducing and millions the firmware of and our has efficiency We XPIC of performance positive. maintenance in March, pipeline own that stack, by at customers the

by begin the first launch to hosted Utility For our services our these impacted production company unexpected our infrastructure, our equipment line of third and compute is digital maintenance transformers towards by higher-than-anticipated weather-related to year.While our portfolio was sites. highlighted by first systems geared of the transforming quarter products at market, significant expansion predominantly of sites. the and this the goal negatively Bitcoin parties throughout of third-party was assets volume and transmission curtailments in the the digital quarter the across end failures, multiple shipping

However, at to pleased record I'm exahash. these a of a high say of and that XX currently mitigated have operating number level issues are we

energizing on economies always scale, we that While the always the began we their we solutions there within time will issues became that stem the machines than challenges, from from at our scale capacity. world. over miners where and it of advantage control this working Ellendale City, our events build control.We began meantime, expand were and how to there always Once our operating We began capacity can X,XXX leverage we successfully able site for transformer were continue simultaneously as have, believed, sites miners operations, redundancies we acquisitions. exogenous newly quickly take globally In to impact as that clear be from that our our equipment, moved to team available from reallocating to and strategic diversify standardize to of multiple believe quickly capacity. were was available immediately owning we the team complicated respond Garden around idle Ellendale mitigate and can potential more and impact the just recent originally new

Despite resolved, have rate record to rate our adapt exahashes to execute. resilience circumstances to ability changing into high and transformer portfolio, and the our and our of challenges, clearly been challenges diversified challenges improving us with cover produced negatively able uptime that month.The record now to going to financial momentum. XX us our operational to Unfortunately, ability who sites, achieve this built first allowed across the been the we megawatts Salman, to the combined more these change our results but we've all-time Our terahash, our hash ability detail. operating to to on the our the impacted have the therefore, continuing positive to still to to over Bitcoin Salman? we Bitcoin's hash an through and challenging, quarter.To strategy still financial convert were results levels, in unpack issues turn grow I'm call results, work into enabled will during capitalize HODL adapt with

Thank Fred, welcome, and MARA. Rob, to team you,

to us As first The net $XXX diluted Bitcoin or We Bitcoin XXX% into Bitcoin share income QX on in digital income in driven strategy transformer was our quarter. for million price, from balance the record our value the impacted in dig last the reported from XXX% year. and increase income our sheet.Revenues in Despite $XXX XXXX. time over $XX quarter favorable positive our price, details. momentum the the in per increased increase quarter.Let's in net share net This other first record fair increase of assets production, and was holdings Bitcoin execute by team's Fred million, consistent diluted $X.XX and of of quarter per primarily was by help negatively challenges, a or ability mentioned, of million drive $X.XX $XXX results higher these a production of market million financial to the to our issues.

Bitcoin top the in to XXX% year XX.X the produced production also XX.X Bitcoin the contributed price Bitcoin price average Bitcoin mined. day the of compared being ago period. revenue mine our $XX prior improvements increase the These period, in We in primarily quarter to by million of million $XX day during was higher of With the a this each each increase approximately average an year in line. quarter average than driven

million, year the a temporarily The of closing revenue result generated a recent hosting $XX ago. was during the hosted was revenues not As customers period. present transition to existing we are hosting providing acquisitions, from which we services

has the and $XX global current of that million plans hash fleet the We $XX more rate by due issues increased network quarter in of in approximately In a first higher costs.In and QX per depreciation use time third-party difficulty growth has XX.X combined to coin.Our day growth.Our per expect in taper cost related QX compared of than levels hosting with XXXX of cost space were million primarily petahash was off their revenue on this tenants to per continued periods, hash increase. hosted petahash to from QX with coming per we Average global That XXXX, to per at own both for operational sites resulted the increase quarters XXXX. improved year. XX% our or of to costs XX% XXXX our last in mining XX.X in in non-GAAP XXXX. off our since as QX rate the energy revenue day and of without transition sites work

hash [Technical was exahash exahash realize was million, Total sites, depreciation $XXX of and change to same expect X $XX acquisitions, larger The cost predominantly revenues, reenergized Depreciation XX.X we our coin from marginal quarter million a recent growing the sites from improve. our amortization the XX announced and the Texas over $XX in acquisition million the includes to we Nebraska. synergies of fixed was cost which rate last from result spread increase third-party year. costs XX.X million energized and and exahash of As compared prior Difficulty] and production to amortization recently our year. our in per of at $XXX hosted capacity,

prior administrative this compared at to with to the change Our over Bitcoin non-GAAP increase compensation increasing scale compared and related in this which of the higher and increased total excluding end $XX of to same employees. year QX XX end XX in due million The was margin, efficiency.General production quarter employees $XX million period. was expenses of year. at $XX million was last amortization increased operational prices, excluding were the the increased $XX the QX This year XXX expenses, business. and million primarily depreciation stock-based Headcount predominantly last year, subsequently quarter has the to from employees to grew in

With operating the As expenses enough we employing and to of the company, averaging our treasury past generally into dollar thoughtfully dollar for to continue price, Bitcoin this talent strategy, add opportunistically selling several involved Bitcoin essentially the coin of a produce average than accretive the discount significantly our for grow we management the remainder strategy to produce more across cost sheet. been then we been cover have a on the our years. stockholders. Bitcoin at our lower even we organization.Part cost By balance strategy has HODL-ing our

$XXX impact to first EBITDA year reminder adjustment, market sheet, in of million price of recognize gains reflects XXX% significant current we accounting million crypto million to period. value XX% nearly that has amount sheet. increased a the environment Primarily value adjusted the recent Bitcoin of of Bitcoin require with our holdings from Bitcoin A this With recognized fair income last have year, XX,XXX new the XXX% QX appreciating digital Bitcoin our favorable the our and the the strategy this the hold strategy our effective that to of to for we In on of quarter rules price on statements. from XXXX. the assets proven from increased has hold on quarters, appreciation financial changes Bitcoins fair at this end value through the in end due value of us.In $XXX our QX we this statement, measurement very year, accounting Because during the the $XXX we that XX,XXX of gain year had on continued we prior in to balance of of balance our the reflecting HODL QX assets Bitcoins.

ago. and change position, up holdings proceeds operating million unrestricted our adjusted for million Bitcoin of balance equivalents $X.X million, with other XX,XXX $XXX can including expenses, $XXX and we XXXX. Bitcoin million. Bitcoin Bitcoin and administrative XX,XXX For by and EBITDA XX, totaled $XXX of and a approximately XX, from balance March during our operating million.Digging cash every price Combined, and of expenses. cost hosting cash year billion at proceeds expenses example, utilized in revenues into of period-over-period impact $XXX approximately cash fund the billion energy Bitcoin cash cash a value to sheet. were to our of fair XXX March cash $X.X held sold on as realizing Also, was approximately We $XX QX, These general more

amount acquisitions we depending year. systematically Fred of as will million at-the-market infrastructure increase, During from of fund strategic been production to have monthly primarily of which the and intend balance the of megawatt and for a sites integrate will quarter, have continue we in will been have assumed for Bitcoin means assets corporate our costs holdings to QX and not raised construction intended our use likely operating on operating Kearney, operational future basis, we successfully highly taken than sites mentioned, combination we These the We $XXX sheet. have per to allowed of a have, teams The accretive the us general expect to year other have able twice as we this cost, sell a construct acquisition and and sites in on were and accounted issues Bitcoin generating have for growth And cash for If to general our corporate Nebraska we fair liabilities purposes.As generally which equity activities, deployed our for been to discussed from move our flexibility it making and accretive above. almost capital our our half also add but miners, also to investments, energize sales, market and Texas rules. fluctuate to for asset-light acquisitions acquired as value miners our through the FASB cost a such stockholders. on conditions. primarily purposes.We more us these recognized holdings with business to Bitcoin acquisition but on Granbury, own, would only

result, of intangible to we primarily and customer also assets million of $XX million, related As goodwill $XX.X a relationships. recognized

another subsequently.One termination S&P other hosted that, Index. worth we also added XXX We million Marathon was certain highlighting Small terminated -- as early expenses customers Cap item accrued to $XX of is

Small market quarters U.S. billion a companies and reminder, recent S&P a that with billion earnings cap most have Just combined. Cap positive and X the between the over tracks $X.X XXX quarter $X XXX

We plans. of strategies future will who about effective we as market proud on our are to Cap the it Bitcoin and to added turn my have capitalize be miner S&P performance more Index. to over conditions.And first that is improving back I'll financial Fred? our to scaled talk This implemented update. Small now Fred, inclusion to the consistently testament the organization a completes

Thanks, Salman.

the year, Over and operating developing our providers using evolved products, to technology and power outsourcing to past to and waste stranded generate heat. operations from owning and marketing energy hosting we've and third-party sites, recycle

about internal we of scale ledger. security known verticals. as laid QX, structure and what strategic scale In is Marcom, Marathon asset geared that This second the stability mining, large the the maintain and organizations consisting world's to the Utility blockchain spoke and is towards that's compute transition align primarily matrix Finance, enhancing and be today, reorganizing build with sharpen digital X is asset digital During operations. technological quarter, our the mining global growth a Marathon these we to large-scale scale Marathon organization first And sustainable restructured our are bolster mining grid we into become our compute the future. harvesting inclusive vertical of and I accountability diversified opportunities, preeminent supporting of remarks, as a opening will digital to for the foundation leverages and into length the second X for in cetera. utility et business my business more a company of units, innovations, focus, our energy such at asset we globally quarter, agility better scale.Starting as speed

at advanced on and hardware, improve and transform Our Conference, at energy operate focused that third in with who is has of software compute us forward, energy those discuss solution the enables Using at to energy reduce will significantly harvesting. the This stranded immersion higher is waste that for already of of increase technology operating vertical, significantly harmful deliver the to economic technologies their of asset energy be launched edge are mission its of combination XPIC group unlock performance performance digital the levels and remarks Empower creating to innovative of division going clean a otherwise digital March, asset products, this and and The digital its energy mission environmentally future.In maximize the efficiency, energy support for productivity value. the is underutilized sites.Our first energy, investment how infrastructure. series building to and dollars opportunities firmware to cost impact services higher the on those return who new we near-minimal did not the MARA by state-of-the-art demonstrated operate I or which foundation enabled total miners the harvesting energy efficiency. into assets, converting sources transformation digital earn mining opening my digital of miners

mining, leveraging the commercial easiest for reuse quite portion a as digital next sub-XX this to energy This purposes. heating industry is greenhouses we reward Celsius XX%. heat applications provided the methane, asset the halving these production from how food in of part as created for For in low-grade materials think for generate and a of includes was important, and heat that it's industrial communities harvested heat used into shrimp our in opportunities response units we that industrial by and be the now, the XX% by to use heat, which as and sequester industry applications event, nearly believe evolve.As block is such This i.e., and processes, saw digital convert energy, perhaps is waste reduced water degrees can as last involving buildings business of this and will compute to evolution of We market pre-heating Bitcoin during all such asset underwent and farms. know, and you just compute total systems.

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the in Our miners pilot project others is demand opportunities in from capturing we're from expect April, in announced global, Finland for across Kenya a Since that appointment, his several Managing Utah, after has of energy appointed chasing Middle in landfill first and the our isn't it. the team parts power domestic, Director in our In verticals to the to expansion to promising region generated quarters.The new Europe, methane south. lead Bitcoin harvesting Africa we these it's to we're and just where East, and north our launch we coming project, we Asia.

our the by While already our of over utility to end XX down is immediate plan international such by of we're to continue the mining doubling scale our exahash or operations XX% operating our our business. grow by XX 'XX. overseas originally is XX and term, years end come continents, from XXXX the targeted approximately We on exahash X revenues scaling more that business on XXXX.In of Marathon coming to

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the we raising will target which fully We always we our our to I'll transformative continue liquidity be back asset and to XX a sites X compute. growth began first launched us, to With company have for produce Marathon, excelling product a for that, size our to Rob across of the for we our record turn leverages capital While diversified it growing digital currently as XX challenges globally into year.QX more during to we evolving business, a to digital we with building inclusive that results. diversified asset balance this Q&A. pipeline was and compute and exahash clear quarter and look continents Rob? ahead sustainable to of all.And fund future ample of exahash battled portfolio XX forward against the of operational of road build doubled financial and the

companies?Fred, start in does to submitted platform.So to our Alexander Q&A other profitable by compared grow some that investors the you Instructions] who [ want a We'll questions popular post mining do ways [Operator what question through of our halving, to stay take Ren most position comes answering better MARA asks, one? in from ], first by and

Sure.

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lower essentially hosting taking their middleman So operator was out as cost margin, much can which, third-party and taking the our cases, out in some XX%. as who the by

to pools earn, of lower above in such FPPS block block revenue transaction revenues over generally, as us provide generate, and abilities earn greater diversification the technologies a such as ability post-halving our to, enhance subsidy which basis. streams, our a per on normal Slipstream, Additionally, what fees with world Bitcoin

brings diversified us the with be streams whatever So that believe to very coming of years advantage take the we're over in we well positioned long-term. the revenue our near- developing we'll be market to positioned and to

buy S short-term?Fred, but you question, we next the well? related a Our a planning [ MARA do in M&A, couple ] of is to and that have Parminder one questions or for looking miners take other asks, as merger to want to out

capacity. companies sites already we've we're hosting that shown and for Well, acquiring the

Now, to have miners been currently. have date, these sites installed mostly we where

fleets The miners we will Most you to it XPs. it's and is fleet worth easy to a and that revenues. a attribute and you that machines to rebuild integrating for comes market. tend a a them of of So which we exceed today miners publicly installed, were smart building miners as a even machines acquire were running miner challenge miners existing that acquiring Pro be is, is SXX do or idea.So cost valuations that point value cost. of or if be value pay are on to to can essentially, the how question their any infrastructure, focused think state-of-the-art miners typically, own installed, at older, it the replacement have acquire to and unless, SXXj especially find want as of in miners, be SXXj opposed down machines, state-of-the-art very And most extra versus challenge have it you have if capacity value their time miner of miners of infrastructure what very at to time you'll wouldn't to that companies with they they fleets. the may still the for miners traded to to have their much age are running Pros class very their I today latest essentially the But to installed that that which that their and course, integration. acquire yourself and The transitioning has pricing

has think the Bitcoin?Salman, what's next of tracking comes this is your this Roshan for who of question reason open is not And [ ATM? been MARA you. do price U ], you Our that think the from the asks, status I one

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the well. is one to Orlando ] as one? [ think that I C current for for what's want your breakeven Bitcoin?You you asks, next take

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P Our plans for reducing what several at efficiency the downtime next from recent your who asks, bitcoin and facilities? comes Tarik are mining question [ increasing ], Fred?

question, great ]. Tarik Yes, [

my in short I what third-party events. a down one we happened transformer then we utility prior time, had sites for hosted that maintenance a had weather mentioned and you shut and QX, think our period sites issues of if at in as remarks, So was about we had done of that line

look you own operate these procedures, standardize things spare across operating All you're have parts so you are to also think exogenous you when of factors.If you everything you doing. equipment do about sites like sites, and for have standard

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efficiencies, tick and more immersion we'll things. you're number of again, some built-in operating under to stripping So we'll out provider immersion just And stripping again, of does dramatically more these of operate deploying out the see we continue improve.When and about also cost begin own see come technology. our The as we at margins. I up that because the think performance technology over impacts our you sites your third-party uptime think control, hosting a time, XPIC

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the and And to turn now appreciate we back to open our operator to covering In I again, up line the from to going Q&A. we'll to questions questions section the the really to our wrap interest interest.I'm call Alicia, back have think you. time, of the analysts. of this

the with Our first comes Lucas Instructions] from question B. [Operator of line Riley Securities. Pipes

the my performance is mentioned. pool question on Fred, you first

versus said was to kind above you rewards? average better. you extent able of XX% think being chance what off pick this I To

Yes.

that win you to that high the over Slipstream at us generate there But the not fees essentially comes So certain period, But percent, standard number week do end XX-point-something had the the to past additional of otherwise it's And top which have fees about that paid were the pool very earn. block fees. from, is of what transactions day, XX%. transactions. would the to get on enables the

what that through the year-to-date, performing how a that And X% X% and been pools this competes FPPS it's really with below for minus does blocks? May, fill pools of of of structure. you Slipstream most index optimally the And whether look amongst part from a is, longer that. value period X. to over where advantage And against.So together allows us of having be is it's the you et start describing this putting system best-of-breed Whereas own and through from leverage important. a why when we're microprocessors of more industry this decline industry et when pool. together. stack that, MARA with a it were the if an than X%, FPPS the the tech cetera. integrated their between block pool use October other fee Apple for that May, cetera, types the cloud as technologies and performed trying then the to above look buying from to almost own all can't has own may year so, it's it MARA doing of vertically services, is their has over vendor, Pool at But PC into highest ecosystem. an another Apple pools operate if top It uses analogy time, through integrated perform people vertically the technologies X periods do reason you're average it whole operating the sometimes X% to you that kind last at rest even is of would way so from And from the early optimum, higher is things built An just chips, transactions, our people software, some that against to X%, time, is their with Pool the an difference A October vendor, sometimes of been the graphics, vendors.

third-party asset we optimized a tightly more in much digital services just leveraging manner compute tech and pools. allows stack and a large-scale operate very believe efficient integrated So you to third-party than buying

to too And I appreciate that? additional early an guide Or from you... would would on be perspective, on a that, modeling revenue it Fred.

Yes.

you definitely And could look work mempool.space. data. you just in this think to can Rob with actually at the see I

fine, averaged others. X%, But different that you a You I time, think how time for use see just can our pool conservative X% of estimate to to reports run can be and periods for would there higher compared fees have quite will we X%, large modeling over operate be average at the time there times where a it's be may same purposes. as where on over number. be X% should then FPPS pools, becomes and which times And but

but know now? front your ones more opportunities M&A, on spending that. of kind there quickly recently turning like I right to you the where this of are energies are thoughts executed you? I appreciate before, and And would on Fred, has you've in come your up

Sure.

So we obviously fill to capacity goal that XX have of already by done, end capacity. And have year. with the the acquisitions available exahash miners get inbound we've this the to our we to

ground that, a but the then to may hasn't of from the there fully attractive. be said as built having and tied-up of as we power mix there's negotiate third-party developers, look somebody kind before, then companies, There's we acquisitions, of So I've mix at wind up. project forward, where and are out deals you're project where going potentially that true to infrastructure. energy build believe hosting sites to sites trying solar out And a developers power, talking greenfield has infrastructure

We quite We we as essentially be seeing at there coming efficient wave We of are look rigs buckets they that opportunities going this it rich of opportunities.And acquire post-halving don't more great the equally. more M&A what that those will we're now believe a pricing So period of comes now we're at and we to post-halving X be shortage compute. buying compute. will all prices additional believe to to there think across in pretty is see And don't when an looking some the that is marketplace same capacity. market now. to be

buy going to other access remain and So are that kind the there's we capacity, with of will to words, able think stable lead easy think you're And relatively rigs. to likely if to also. more fairly time a sites we that that, be market in continue shortage build sites

leverage as little being goal, with XX continually there. you everybody and at else. harvesting where we companies think expansion obviously, provides the Marathon, resilient in we So ups because, robust large that and operator able business out and than going get to weather That's downs operate can energy bit be the efficient, the utility a and better really look and optimized a look of you think towards technology and sales also we the exahash 'XX, with would, 'XX to at most combined then where you we you most not that 'XX, very halving scale have XXXX mining, like we're scale, if stop towards

it team, I the luck. to turn Fred, is and over. to best you want of helpful. This

with line Compass next question the Point Joe from Research. of Our Flynn comes

freeing timelines And color more it I on, to a I capacities legacy provide had that Capital ultimately, were of be you transitioning regarding of hosted self-mining, how question that acquisitions. the many up wondering was by the capacity customers. Generate would and helpful. if could megawatts currently

Yes.

be we already thereafter. or vacated by about were we we XX that shortly XXX-ish June, capacity megawatts of total about and the will had XX the XXX think is So end somewhere using. which which megawatts megawatts, then of of around There balance,

of we'll So miners XXX% have QX. utilization we our that in site think for

hour to kilowatt from kind second see Great. forward, half going lower of in then due much should to kind we the own And ultimately, machines? can costs your a in per just a basis? just But think how impacted about hash power maybe infrastructure of cost just the follow-up you install as costs look be on And efficient uptime. costs. more to the power and we layer those costs how how improvement owning can The

Sure.

something from things It and the market in the operate that $X.XX we allow there's when the first really challenge upwards strip to we that and costs, opportunistic. depends happen was that's example.When for between upwards to sites the sites we benefit have we run kilowatt The sub of cost you you, it It So in if that have in didn't can operated power actually on trading, reaped of sites But temperature energy, big were very advantage get in you from the versus that that -- of quarter to look that.The sites Texas the some is rather difference you gains using third-party, big very owning we some curtailment from take at programs variety we with spikes, depends activity. monetize the where third-party of And we material already sites benefit in of. using were a of by hour operate the their economic comes infrastructure cetera. benefit somewhere $X.XX which charging now are technology. a the an site was We way that hosting $X.XX of costs, things this of et ranges operating prices, hour. we PTAs out kilowatt per as covering have, can the type of kind immersion the own technology of range the as $X.XX what that of power lower provider their that more their $X.XX. on believe some to kind wide to where which a

shift the is third-party across So that and key owned hosted provider. different the margin stripping range asset-light out sites. But operated somewhere the in from savings that of the to from

imagine significant. can mine a hour pretty $X.XXX to you kilowatt your $X.XX So cost is to in reduction

next from Kevin comes the with of line Dede H.C. question Wainwright. Our

Could on on you, And when the at Generate power? to building give available Could a you from back the back? on old Fred, plan maybe little how filling you your know you moved I Capital sites. think thinking rigs us bit able might onion rigs Ellendale. capacity peel move have out? some you you be I or

you'll able Just with year? to give us and how XX this some you're feeling going support power be exahash for where

question me see let So properly. I your if understood

as So QX into from a capacity a little be existing capacity perspective, the we'll and bit a well. over filling out QX lot of

majority transformer prior partially. its back on class made up Right machines.Within XX% about bit at comes of week, vacated, of be of all site capacity, state-of-the-art that we've case to more site. SXX Ellendale, it's as in leading has operating power able capacity little are most been question, QX. online should coming of fixes each I a are And really Applied into little the seeing hosted XX%, now bring the a -- by max somebody's a bit of into and whole quarter the we that in slew halve customers to of the this and earlier plug to As said miners end we by

far, so there. of we've ahead been schedule And

a to make ready to Ellendale miners there. the way the just to miners. for Garden easy move as We X,XXX -- had capacity, was -- to plug we to moved go the it miners we in City from So

it made to so, sense And that. do

As in we machines ready have Ellendale continues to online, to go back slots. to those up empty take come to plug

weekly But basis, back the to that's asking only months. up related no perspective next that power balance more were really So mentioned, the that's a be energization challenge a to all at that in we're what over cost, But regards you site power seeing that is coming at change what's as if left energization. I will an for Ellendale. to on and essentially, in was from if or do the progressing just of

question, of that were the you thought was, subtext thinking I how not that just came making apologies Generate might this I sites offered the not for capacity, whether and Fred, thought that. you Capital was X clear it Well, the with year about capacity. reach adding power to And or it you wondering flexibility you need XX?

that if expand that is The energizable, we don't capacity at to sites. you we No, need capacity any would. have

additional exahash. need no us covers So expansion to XX for

think sites in capacity at more target. the an of that anything growth increase site Generate as would additive and XXXX would be that be So

ton if theme of add to your of heat let but theme? me, Fred. you detail. please little things a not you a more energy You color calls, reuse couple Could your a mentioned on One and harvesting

Yes.

So, taking or have And come wasted stranded energy and in that in regard. is again, can of come can in off It multiple right? that essentially running the coming energy. that in Utah the forms, methane we've form harvesting of pilots we about landfills talked

You example, dairy flare for of there Obviously, can lot manure. methane out also farming generates and methane coming a is agricultural of a of capture from oilfields, gas processes. variety

all of things waste. comes the that, a of product of lot as out Think You ethanol, that agricultural methanol processing base. these which bio out the can plant, is comes food waste that such of manufacturing, essentially, stuff take

base them. those and, digesters, with products through anaerobic electricity take can You generate

can process. then electricity. the the back generated to fed the You that then And heat miners use Bitcoin miners consume be by into industrial

manufacturing, case for ethanol, pre-heat manufacturing, to the cetera. spirits, biomass you et need in to of beer, ethanol So the make example, methanol you're alcohol, using that and

in things there's agriculture, can you'll find that do to generate used the have or You into et can similar and heat cetera. bio then like of greenhouses things of case shrimp waste the that farms, back you feed for mass.And be lot and fermentation a

very reuse heat is important. So

the buildings. case use have heating also just of You simple

You at can XPIC generates, type a can that going boiler same. our technology it take you of can with boiler amount and in electricity and the cost. that power just to with water replace same you Same similar water normally of is generate miners energy hot

importantly, even savings, part them to the to of cost our building or traditional situation of long it's from boilers transitioning cost-neutral harvesting even solution a get processing if the to deploy benefit gas and hopefully energy get heat savings the cost or heating to of cost that, should more sale XXX% energy can as transition, the the heat material of mine where back then waste process term, for potential to mitigate oil, electric or them and so, essentially And the they energy free.And natural if we or of the the versus Bitcoin having owner, our industrial is benefit a of an into is your cost. they're

so, free. Bitcoin for of done the And is mining

these just sites, benefit to could are XX scale transmission sites granted, you were smaller that Now but of size. megawatts additional some lines if X eventually, have you're the you in available, And are sell generating. potentially electricity these the

mining over energy out a upward business. produce develop time, that going millions lower I at scale amongst the Bitcoin the scale with lower decentralize X the over a Bitcoin potentially the halving, you because where to will and utility that, and we tail if that you're So next see of years, have because, to to scale thousands talked long large accelerated are Bitcoin not a will into utility to an our those our hundreds this as more at energy things not mine cases. but secure believe Bitcoin, more mining of can't of if blockchain cost a become diversify transactions utility to eventually X this of come And to is start way cost its factor important mining costs, miners you you than there process to all leveraging essentially a the of in important big trends It's price concentration challenging miners. where that pace, mining and about very more then get at place Bitcoin, Bitcoin potentially, business,

the to is sources, these combination goal energy combination And things industry are primary to technology, get so, your our the optimizing be the operations.And really really continue the of of where one become to important for the the and beyond positioned driver operators block cost next lowest to remain alternative to of the we lead of all point the Bitcoin subsidies halving when well miners. revenues using

Our next the Company. Needham from line & John of question with comes Todaro

you question, a through us kind XX here? of that I some 'XX?And anticipate just like getting there if of just needed do cadence wondering then could you G&A bit from to end mostly remind X, more. of exahash guess by sounded still if of you But stay do. could the was drill we second hires the flat kind to It into

I'll question. relative the I So G&A the as quarter cadence Salman But this deployment, the really up starts to freeing capacity let the answer and end said the early sites of part at QX. of of before, at

large of impacts to can important underclock you is acquired if de nooks the to efficiencies with latter to cost gives online can then technologies of and will get It do saves same and number XX% And we of SXXs will think have price. save overclock you capital. of of at these that increase the I it perspective on of We're QX then inbound We XPIC potentially or of sites little we balance as also efficiency.So the we flexibility types you growth more back all an to of and time of can out become Ellendale about continue with and and before capacity the to efficiency, start do and immersion going Bitcoin to And happen XX% of are into which and loss a the have minimis uptime. it term, this the plus because the capacity. talking overclock, things upgrading fill fill a lot exist a depending longer lot immersion a there. what some can out and really lot minimal that of flexibility overclock miners doing all from fully QX energy increase part crannies that capacity the a tune you from air benefits CapEx, to over and

impact year. beyond especially the term, we So we're grow the of exahash longer very excited about XX of as end this well kind the that of at on

exahash. the from that a deploy basis, improve continue on unit is On and company we here a forward compensation, the here. you about a if across from G&A think basis spread It's a that, which to quick in flattish standpoint, as it we expect the reminder it cash to going stock be a larger item, from G&A, non-cash quarter-over-quarter exahash excluding on more we

Our Point from Compass next comes Joe the question of line with Flynn Research.

question. when terahash? XX.X having the like a was greatest what wondering joules the SXX, most had referring and I progress terahash Auradine. Fred, Pro joules per on version talk also, about you I it's where are the And or you XX to recent is per latest

Yes.

megawatts what to is UAE if today for consume X.X and same is each we just that more look at that can of team to dual the process I'm company's factor upgrade. have huge that. Auradine, XXX specifically going our more the and But XX-foot immersion the We'll container them have X-foot -- comment about X in capacity which and X-phase do I'll be on form we are almost container put the to we'll with fairly up mining the a is achievements container, is, power tanks. in deploying not what -- Well, because you all power, end density essentially a on miners, to essentially can our is of management a take let available. sites, ability I at megawatt. Same in power So phase factor a we in ability Auradine kilowatts will more the you say of -- low immersion retrofit essentially cost

XX a be into built for us to is, vendors to differentiator with with building miners going Auradine's their and grow regarding And supply. fabless And them that's semiconductor that's big intelligence forward.The like that, capacity wafer the believe is we company, fleet So management. advantage lot we'll a there XX of Auradine does any going them continue in than efficiently of to Bitmain Pro continue regards The yes, not product version. the Pros is immersion come question, immersion the the But of version. version supply version joules the to buy terahash. and a a mix more from chain increases.In the as air the operates per

question. of Hopefully kind So X. your answers that the mitigates

I'm Samuels going closing There are further turn no to remarks. to you. Thank Rob questions. over the call for back

time Thank your today. you all for

today's that team any contact answered Enjoy have not feel the our you rest were at your If please during day. Relations questions you. free to call, Investor thank ir@mara.com, and of

This concludes today's teleconference.

You may Thank at for this your lines time. participation. your you disconnect