Marathon Digital Q1 Earnings Call Highlights

Key Points

• Marathon Digital is pivoting beyond Bitcoin mining into a broader digital infrastructure strategy centered on AI, high-performance computing, and critical IT workloads, highlighted by the Long Ridge acquisition, the Starwood joint venture, and the Exaion investment.
• The company’s Long Ridge deal is being positioned as a major AI campus platform, with potential to expand capacity from about 200 MW to more than 1 GW and to boost Marathon’s owned and operating capacity by roughly 65% if completed.
• Despite operational progress, Q1 results were pressured by the lower Bitcoin price, with revenue down to $174.6 million and a net loss of $1.3 billion, though Marathon also cut debt, reduced dilution risk, and ended the quarter with 35,303 Bitcoin on hand.

Marathon Digital NASDAQ: MARA executives said the company used the first quarter of fiscal 2026 to accelerate its shift from a pure-play Bitcoin miner toward a broader digital infrastructure business focused on power-backed AI, high-performance computing and critical IT workloads.

Chairman and CEO Fred Thiel described the quarter as “redefining” for MARA, citing the execution of its Starwood joint venture, the acquisition of a majority interest in Exaion, the retirement of a portion of its convertible debt and the post-quarter announcement of a definitive agreement to acquire Long Ridge Energy & Power from FTAI Infrastructure.

“These were not isolated events,” Thiel said. “They are connected pieces of a strategy that is now fully in motion.”

Long Ridge Deal Positioned as AI Campus Platform

Thiel said MARA views Long Ridge as a “land and power acquisition” designed to support development of a large compute campus. The asset is adjacent to MARA’s existing Hannibal operations and includes roughly 1,600 acres, with a path to expand existing power capacity from 200 megawatts to more than 1 gigawatt, according to the company.

The Long Ridge site includes an approximately 505-megawatt nameplate combined-cycle gas turbine in the PJM Interconnection. Thiel said the plant generated $144 million of annualized adjusted EBITDA in the second half of 2025, with 76% contracted capacity.

Thiel said the transaction would increase MARA’s owned and operating capacity by about 65%, from approximately 1.3 gigawatts of energized capacity today to roughly 2.2 gigawatts by closing, and 2.4 gigawatts including expansion capacity. MARA said it has been in advanced discussions with prospective tenants across multiple sites.

The company’s current plan for Long Ridge calls for an initial 200-megawatt AI build-out, with construction beginning around the first half of 2027 and initial capacity expected online in mid-2028. In response to an analyst question, Thiel said a 200-megawatt facility would likely take 18 to 24 months before coming online, with behind-the-meter expansion expected sooner than additional grid interconnection capacity.

Thiel emphasized that existing Bitcoin mining operations at Hannibal would continue until the data center campus requires the power. He also said MARA does not expect to reduce Long Ridge’s current supply of power into the PJM grid.

Starwood Joint Venture Advances Tenant Discussions

MARA executives also highlighted progress on the company’s strategic partnership with Starwood. Thiel said the company advanced permitting and site preparation and entered active tenant discussions with multiple counterparties, including hyperscalers, across 90% of its existing owned and operated sites, including Long Ridge.

Thiel said Starwood brings data center development and engineering, procurement and construction capabilities, along with experience developing more than 7 gigawatts of data center capacity worldwide. MARA’s role in the joint venture is to contribute sites, with value determined by pre-agreed site-specific economics tied to power, land, interconnection and development attributes.

Thiel said that on an illustrative 200-megawatt project, MARA could generate approximately $50 million to $100 million of net annualized stabilized cash flow based on a 9% to 15% yield-on-cost range, with “little to no incremental equity required” beyond the contributed site value. He said the company expects to sign multiple tenant leases by year-end and will disclose contracted megawatts as the pipeline converts.

During the question-and-answer session, Thiel said prospective tenant competition is giving the company confidence in its leasing timeline. He said demand for AI capacity continues to rise as model providers and enterprises require more compute for training and inference workloads.

Exaion Expands AI Strategy Beyond Hyperscalers

Thiel said Exaion gives MARA a second pathway into AI infrastructure, focused on sovereign, enterprise and private cloud deployments. He said governments and enterprises, especially in Europe and Canada, increasingly want greater control over compute, data autonomy, compliance and security.

“The simplest way to think about it is Starwood and Exaion are different expressions of the same thesis,” Thiel said. “The JV pursues large-scale colocation for hyperscalers. Exaion pursues private cloud, sovereign AI, and enterprise deployments in regulated markets.”

Thiel said MARA is building on activity in the UAE, Finland and Oman and is in discussions with major energy companies in France, Brazil and Saudi Arabia.

Revenue Falls as Bitcoin Price Weighs on Results

Chief Financial Officer Salman Khan said first-quarter revenue was $174.6 million, down from $213.9 million in the prior-year period. The decline was primarily driven by an 18% decrease in Bitcoin’s average price, which reduced revenue by $33.1 million, along with lower production and reduced revenue from other digital asset hosting services.

MARA reported a net loss of $1.3 billion, or $3.31 per diluted share, compared with a net loss of $533.4 million, or $1.55 per diluted share, in the first quarter of 2025. Khan said approximately $1 billion of the first-quarter 2026 loss came from an unrealized mark-to-market fair value adjustment on digital assets tied to the decline in Bitcoin’s price.

Adjusted EBITDA was negative $1 billion, compared with negative $483.6 million in the prior-year period. Khan said the figure was also dominated by Bitcoin mark-to-market changes.

Operationally, MARA delivered a record energized hash rate of 72.2 exahash per second, up 33% from 54.3 exahash per second in the first quarter of 2025. The company mined 2,247 Bitcoin, or 25 Bitcoin per day, about 39 fewer Bitcoin than in the prior-year period, as higher network difficulty offset increased hash rate.

• Cost per kilowatt-hour at owned sites was $0.04 in the quarter.
• Purchased energy cost per Bitcoin at owned mining sites was $40,047, up from $35,728 a year earlier.
• Daily cost per petahash per day improved 3% year over year to $27.6.

Balance Sheet Actions Reduce Debt and Dilution Risk

Khan said MARA retired approximately 33% of its outstanding debt during the quarter, including a 30% reduction in convertible notes at a discount. He said the actions reduced potential dilution from convertible notes by as much as approximately 46 million shares, or 9% on a fully diluted basis.

The company sold approximately $1.5 billion of Bitcoin during the quarter, using proceeds to repurchase more than $1 billion of face value of its 2030 and 2031 notes at a discount and reduce its line of credit by $200 million. MARA also refinanced $150 million of its line of credit at a 7% interest rate, down from 10.5%.

Khan said MARA has not used its at-the-market equity offering program since the end of the third quarter of 2025, funding operations and balance sheet actions through Bitcoin monetization rather than equity issuance.

At quarter-end, MARA held 35,303 Bitcoin, down 12,228 from the prior year. About 28% of the holdings were activated and loaned or pledged as collateral, generating $6.4 million of interest income during the quarter.

MARA also reduced its workforce by 15% as part of a realignment toward AI and critical IT, producing expected annualized savings of $12 million. The company recorded a $45.9 million restructuring charge related to eliminated initiatives and realignment.

Thiel closed by saying the company recognizes investors want evidence of execution, including signed contracts and contracted megawatts. “MARA is redefining itself as a digital infrastructure company,” he said, “controlling and monetizing electrons to their best value across multiple compute markets.”

About Marathon Digital NASDAQ: MARA

Marathon Digital Holdings, Inc is a digital asset technology company specializing in the mining and acquisition of bitcoin. Headquartered in Las Vegas, Nevada, the firm employs high-performance application-specific integrated circuit (ASIC) miners and proprietary software to secure the Bitcoin network and expand its crypto-mining footprint. Marathon Digital focuses on operational efficiency and scalability, while maintaining rigorous standards for regulatory compliance and corporate governance.

The company operates multiple large-scale mining facilities throughout North America, including sites in Texas, Montana and New York.

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