10q10k10q10k.net

What changed in MARA Holdings, Inc.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of MARA Holdings, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+466 added−668 removedSource: 10-K (2025-03-03) vs 10-K (2024-02-28)

Top changes in MARA Holdings, Inc.'s 2024 10-K

466 paragraphs added · 668 removed · 190 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

48 edited+28 added−36 removed10 unchanged
Biggest changeOverall, our R&D process is designed to support the creation and development of innovative technology advancements that ensure we maintain our competitive advantages and improve its position as a leading bitcoin miner. We believe that this process is essential for driving growth, staying ahead of the competition, and achieving success.
Biggest changeWe also conduct market testing to gather feedback from real-world users, and use this feedback to refine and improve the product or service. 9 Table of Contents Overall, our R&D process is designed to support the creation and development of innovative technology advancements that ensure we maintain our competitive advantages and improve our position as a leading bitcoin miner.
BITCOIN BLOCKCHAIN Bitcoin and Bitcoin Mining Bitcoin is a decentralized digital asset that operates on a peer-to-peer network, allowing users to send and receive payments without the need for banks and other intermediaries. Bitcoin is not linked to any fiat currency or country’s monetary policy, therefore serves as a store of value outside of government control.
BITCOIN BLOCKCHAIN Bitcoin and Bitcoin Mining Bitcoin is a decentralized digital asset that operates on a peer-to-peer network, allowing users to send and receive payments without the need for banks and other intermediaries. Bitcoin is not linked to any fiat currency or country’s monetary policy and therefore serves as a store of value outside of government control.
Halving is a key part of the Bitcoin protocol and serves to control the overall supply and reduce the risk of inflation in digital assets using a Proof-of-Work consensus algorithm.
The halving is a key part of the Bitcoin protocol and serves to control the overall supply and reduce the risk of inflation in digital assets using a Proof-of-Work consensus algorithm.
At Marathon, we seek to attract a pool of diverse, best-in-class candidates and foster their career growth by hiring the best talent available, rather than relying solely on educational background. In support of such initiative, we look for candidates in local communities and large cities alike, and from a variety of backgrounds.
At MARA, we seek to attract a pool of diverse, best-in-class candidates and foster their career growth by hiring the best talent available, rather than relying solely on educational background. In support of such initiative, we look for candidates in local communities and large cities alike, and from a variety of backgrounds.
While we anticipate that bitcoin mining will be an area of focus for regulators in 2024 and beyond, we cannot predict with certainty the impact regulations may have on our business or operations.
While we anticipate that bitcoin mining will be an area of focus for regulators in 2025 and beyond, we cannot predict with certainty the impact regulations may have on our business or operations.
We maintain a robust process for ensuring pay equity across the Company and increases in incentives and compensation based on merit and performance. In addition, we provide a comprehensive range of benefits options, including medical, dental and vision insurance for employees and family members, paid and unpaid leaves, and life and disability/accident coverage.
We maintain a robust process for ensuring pay equity across MARA and increases in incentives and compensation based on merit and performance. In addition, we provide a comprehensive range of benefits options, including medical, dental and vision insurance for employees and family members, paid and unpaid leaves, and life and disability/accident coverage.
As demand for bitcoin increases, the global network hash rate rapidly increases, and as more adoption of bitcoin occurs, we expect the demand for new bitcoin will likewise increase as more mining companies are drawn into the industry by this increase in demand. Further, as more and increasingly powerful mining rigs are deployed, the network difficulty for Bitcoin increases.
As demand for bitcoin increases, the global network hashrate rapidly increases, and as more adoption of bitcoin occurs, we expect the demand for new bitcoin will likewise increase as more mining companies are drawn into the industry by this increase in demand. Further, as more and increasingly powerful mining rigs are deployed, the network difficulty for Bitcoin increases.
Network Hash Rate and Difficulty Generally, a bitcoin mining rig’s chance of solving a block on the Bitcoin blockchain and earning a bitcoin reward is a function of the mining rig’s hash rate, relative to the global network hash rate (i.e., the aggregate amount of computing power devoted to supporting the Bitcoin blockchain at a given time).
Network Hashrate and Difficulty Generally, a bitcoin mining rig’s chance of solving a block on the Bitcoin blockchain and earning a bitcoin reward is a function of the mining rig’s hashrate, relative to the global network hashrate (i.e., the aggregate amount of computing power devoted to supporting the Bitcoin blockchain at a given time).
Therefore, as new and existing miners deploy additional hash rate, the global network hash rate will continue to increase, meaning a miner’s share of the global network hash rate (and therefore its chance of earning bitcoin rewards) will decline if it fails to deploy additional hash rate at pace with the industry.
Therefore, as new and existing miners deploy additional hashrate, the global network hashrate will continue to increase, meaning a miner’s share of the global network hashrate (and therefore its chance of earning bitcoin rewards) will decline if it fails to deploy additional hashrate at pace with the industry.
Each confirmed transaction is cryptographically signed and permanently recorded in the blockchain as a new block, and cannot be altered or deleted. The block chain is maintained by a robust and public open-source architecture consisting of a network of computers, known as nodes, that work together to verify and validate new transactions.
Each confirmed transaction is cryptographically signed and permanently recorded in the blockchain as a new block, and cannot be altered or deleted. 6 Table of Contents The blockchain is maintained by a robust and public open-source architecture consisting of a network of computers, known as nodes, that work together to verify and validate new transactions.
One key element of our investment strategy is to focus on companies that are at the forefront of emerging technologies and industries. We believe targeted companies have the potential to drive significant innovation and growth, and we are committed to supporting the development through investments in both hardware and software companies.
A core element of our investment strategy is to focus on companies that are at the forefront of emerging technologies and industries. We believe targeted companies have the potential to drive significant innovation and growth, and we are committed to supporting the development through investments in both hardware and software companies.
The digital asset mining industry is a highly competitive and evolving industry and new competitors and/or emerging technologies could enter the market and affect our competitiveness in the future. INTELLECTUAL PROPERTY We actively use specific hardware and software for digital asset mining operations.
The digital asset mining industry is a highly competitive and evolving industry and new competitors and/or emerging technologies could enter the market and affect our competitiveness in the future. 11 Table of Contents INTELLECTUAL PROPERTY We actively use specific hardware and software for digital asset mining operations.
We rely upon the following to protect and enforce our proprietary information and intellectual property: 12 Table of Contents • trade secrets; • trademarks; • service marks; • trade names; • copyrights; and • other intellectual property rights. Additionally, we expect to license the use of intellectual property rights owned and controlled by others.
To protect and enforce our proprietary information and intellectual property, we rely upon trade secrets, trademarks, service marks, trade names, copyrights and other intellectual property rights. Additionally, we expect to continue to license the use of intellectual property rights owned and controlled by others.
As used throughout this Annual Report, the term “Bitcoin” with a capital “B” is used to denote the Bitcoin protocol which implements a highly available, public, permanent, and decentralized ledger. The term “bitcoin” with a lower case “b” is used to denote the token, bitcoin.
As used throughout this Annual Report, the term “Bitcoin” with a capital “B” is used to denote the Bitcoin protocol which implements a highly available, public, permanent, and decentralized ledger. The terms “bitcoin” with a lower case “b” and “BTC” are used to denote the coin, bitcoin.
We also have developed, and may further develop, certain proprietary software applications for purposes of its digital asset mining operation and may license proprietary software application to third parties.
We also have developed, and may further develop, certain proprietary software applications for purposes of our digital asset mining operations and may license proprietary software application to third parties.
Overall, our investment strategy is designed to support our growth and success, while propelling our business to be the most advanced, agile, and efficient bitcoin miner. We are committed to making strategic investments that align with both our vision and values, and believe this approach will help us achieve long-term success.
Overall, our investment strategy is designed to support our growth and success, while propelling our business to be the most advanced, agile, and efficient bitcoin miner. We are committed to making strategic investments that align with both our vision and values, and believe this approach will help us achieve long-term success. OPERATIONS We deploy miners at sites on four continents.
The next halving for the Bitcoin blockchain is anticipated to occur around April 2024 at block height 840,000. This process will recur until the total amount of bitcoin currency rewards issued reaches 21.0 million, and the theoretical supply of new bitcoin is exhausted, which is expected to occur around 2140.
The next halving for the Bitcoin blockchain is anticipated to occur around April 2028 . This process will recur until the total amount of bitcoin currency rewards issued reaches 21,000,000, and the theoretical supply of new bitcoin is exhausted, which is expected to occur around 2140.
We remain focused on maximizing our chances of successfully solving blocks on the Bitcoin blockchain by growing our hash rate, or the amount of computational power we devote to supporting the bitcoin blockchain, to enhance our ability to successfully solving blocks.
We remain focused on maximizing our chances of successfully processing blocks on the Bitcoin blockchain by growing our hashrate, or the amount of computational power we devote to supporting the Bitcoin blockchain, to enhance our ability to successfully process blocks.
Our R&D process is designed to support the creation and development of new tools and processes intended to serve an integral part of our overall business strategy and enhance our market position as an advanced and sustainable bitcoin miner. The first step in the R&D process is ideation, which is the process of generating and evaluating new ideas.
Our R&D process is designed to support the creation and development of new tools and processes intended to serve an integral part of our overall business strategy and enhance our market position as an advanced and sustainable bitcoin miner.
We believe our performance plan is a key incentive for our employees that aligns their long-term interests with our long-term objectives as an organization. We also compare salary and wages against quantitative benchmarks and adjust monetary compensation to ensure wages are competitive and consistent with employee positions, skill levels, experience, and geographic location.
We believe our equity plan serves as a key incentive for our employees, aligning their long-term interests with our objectives as an organization. 12 Table of Contents We also compare salary and wages against quantitative benchmarks and adjust monetary compensation to ensure wages are competitive and consistent with employee positions, skill levels, experience, and geographic location.
“ Risk Factors ” of this Annual Report. HUMAN CAPITAL AND DIVERSITY, EQUITY AND INCLUSION As of December 31, 2023, we had a total workforce of approximately 60 employees across our entire organization, all of whom were employed full-time, including professionals in accounting, communications, engineering, finance, growth, human resources, information and technology, investor relations, legal, and operations.
HUMAN CAPITAL RESOURCES As of December 31, 2024, we had a total workforce of approximately 152 employees across our entire organization, all of whom were employed full-time, including professionals in accounting, communications, engineering, finance, growth, human resources, information and technology, investor relations, legal and operations.
REGULATORY LANDSCAPE We operate within a complex and rapidly evolving regulatory environment and are subject to a wide range of laws and regulations enacted by U.S. federal, state, and local governments, governmental agencies, and regulatory authorities, including the SEC, the Commodity Futures Trading Commission (the “CFTC”), the Federal Trade Commission (the “FTC”), and the Financial Crimes Enforcement network of the U.S.
REGULATORY LANDSCAPE We operate within a complex and rapidly evolving regulatory environment and are subject to a wide range of laws and regulations enacted by U.S. federal, state, and local governments, governmental agencies, and regulatory authorities, including the U.S.
Strategic Investments We are committed to pursuing strategic investments that align with our vision and values. Our strategic focus is to identify and partner with companies that we believe will generate synergies to create long-term value for our stockholders.
We believe that this process is essential for driving growth, staying ahead of the competition, and achieving success. Strategic Investments We are committed to pursuing strategic investments that align with our vision and values. Our strategic focus is to identify and partner with companies that we believe will generate synergies to create long-term value for our stockholders.
Our strategy with human capital resources is to align the interests of our employees with our key long-term success drivers. In execution of this strategy, we adopted an equity incentive plan, under which all eligible employees can be granted options, restricted stock, preferred stock, restricted stock units or warrants.
Our human capital resources strategy is to align the interests of our employees with our key long-term success drivers. In execution of this strategy, we maintain an equity incentive plan, under which all eligible employees can receive equity grants.
In certain cases, source code and other software assets may be subject to an open-source license, as much of the technology development underway in our sector is open source. We currently own five patents in the United States and have six patent applications pending. The expiration dates of our patents range from March 2036 and November 2043.
In certain cases, source code and other software assets may be subject to an open-source license, as much of the technology development underway in our sector is open source. We currently own two patents in the United States and have 17 patent applications pending. Our patents have various expiration dates, generally 20 years from the respective original filing date.
Generally, the greater the share a single mining rig can capture of the blockchain’s total network hash rate, or the aggregate hash rate deployed to solving a block on the Bitcoin blockchain, the greater the rig’s chances of solving a block and therefore earning the reward.
Generally, the greater the share a single miner can capture of the blockchain’s total network hashrate, or the aggregate hashrate deployed to processing blocks on the Bitcoin blockchain, the greater the miner’s chances of processing a block and therefore earning the reward.
STRATEGIC FOCUS Our focus in 2023 was on growth execution and transition into a more mature organization with diversified portfolio of bitcoin mining technologies and assets.
STRATEGIC FOCUS Our focus in 2024 was on growth, execution and transition into a more mature organization with a diversified portfolio of bitcoin mining sites while strategically reducing bitcoin production costs.
Miners can range from individual enthusiasts to professional mining operations with dedicated data centers. Miners may organize themselves in mining pools. We compete or may in the future compete with other companies that focus all or a portion of their activities on owning or operating digital asset exchanges, developing programming for the blockchain, and mining activities.
We compete or may in the future compete with other companies that focus all or a portion of their activities on owning or operating digital asset exchanges, developing programming for the blockchain, and mining activities.
At a predetermined block, the mining reward is cut in half, hence the term “halving.” For example, the reward for adding a single block to the blockchain was initially set at 50 bitcoin currency rewards.
At a predetermined block, the block subsidy portion of the reward is cut in half, hence the term “halving.” For example, the block subsidy for adding a single block to the blockchain was initially set at 50 bitcoin currency rewards. The Bitcoin blockchain has undergone a halving four times since its inception, most recently in April 2024.
Bitcoin mining plays a key role in the maintenance and growth of the Bitcoin network by providing the computational power needed to verify transactions and add new blocks to the blockchain. As consumers increasingly become interested in mining bitcoin, the network becomes more secure and efficient.
Bitcoin mining plays a key role in the maintenance and growth of the Bitcoin network by providing the computational power needed to verify transactions and add new blocks to the blockchain. We believe that, as the Bitcoin network becomes more secure, its enhanced security may drive greater adoption and transaction volumes and fees.
Further, the value of bitcoin and other digital assets may be significantly impacted by factors beyond our control, including consumer trust in the market acceptance of bitcoin as a means of exchange by consumers and producers.
Further, the value of bitcoin and other digital assets may be significantly impacted by factors beyond our control, including consumer trust in the market acceptance of bitcoin as a means of exchange by consumers and merchants. 7 Table of Contents Halving The halving is an important part of the Bitcoin ecosystem, and it is closely watched by miners, investors, and other participants in the digital asset market.
COMPETITION In digital asset mining, companies and individuals use computing power to solve cryptographic algorithms to record and publish transactions to blockchain ledgers or provide transaction verification services to the Bitcoin network in exchange for digital asset rewards. The current reward for verifying a block on the Bitcoin blockchain is 6.25 bitcoin.
(2) The Hansford County, Texas acquisition closed subsequent to year end, on February 14, 2025. COMPETITION In digital asset mining, companies and individuals use computing power to solve cryptographic algorithms to record and publish transactions to blockchain ledgers or provide transaction verification services to the Bitcoin network in exchange for digital asset rewards.
This involves conducting thorough testing of the prototype to identify any issues or flaws, and to ensure that it meets our rigorous quality standards. We also conduct market testing to gather feedback from real-world users, and use this feedback to refine and improve the product or service.
This involves conducting thorough testing of the prototype to identify any issues or flaws, and to ensure that it meets our rigorous quality standards.
Currently, the information concerning the activities of these enterprises is not readily available as the vast majority of the participants in this sector do not publish information publicly or the information may be unreliable.
Currently, the information concerning the activities of these enterprises is not readily available as the vast majority of the participants in this sector do not publish information publicly or the information may be unreliable. We believe our acquisitions and our ongoing deployment of miners positions us well among the publicly traded companies involved in the digital asset mining industry.
When a user sends a transaction on the Bitcoin network, it is broadcast to the network and added to a pool of unconfirmed transactions known as the “mempool.” Mining rigs then compete in a sort of lottery to “solve a block,” which confirms a transaction and adds it to the blockchain, and the mining rig receives a reward in the form of newly minted bitcoin.
When a user sends a transaction on the Bitcoin network, it is broadcast to the network and added to a pool of unconfirmed transactions known as the “mempool.” Miners, which operate specialized hardware, known as bitcoin mining rigs or application-specific integrated circuits (“ASICs”), then compete to process these unconfirmed transactions into a “block.” The first miner to successfully confirm and assemble the transactions into a block receives a reward in the form of newly minted bitcoin (block subsidy) and transaction fees.
A substantial number of our bitcoin miners are located in Texas and North Dakota, which are generally favorable regulatory environments for bitcoin miners as compared to other states.
A substantial number of our bitcoin miners are located in Texas and North Dakota, which are generally favorable regulatory environments for bitcoin miners compared to other states. However, we may also become subject to additional regulatory requirements on a state and local level in the geographies in which we operate, and as we strategically expand our operations into new areas.
Department of Treasury, as well as similar entities in other countries. Other regulatory bodies have demonstrated an interest in regulating or investigating companies engaged in blockchain or cryptocurrency businesses. Regulations may substantially change in the future and it is presently not possible to know how regulations will apply to our business, or when they may be effective.
Regulations may substantially change in the future and it is presently not possible to know how regulations will apply to our business, or when they may be effective.
This focus consisted of both the expansion of operations of our core bitcoin mining business (operating mining rigs at third-party owned and operated data centers), acquiring and operating bitcoin mining sites to host our own bitcoin mining rigs, and operating MaraPool, our proprietary bitcoin mining pool which orchestrates the operation of our fleet of mining rigs.
This focus consisted of the expansion of operations of our core bitcoin mining business, acquiring and operating bitcoin mining sites to host our own bitcoin mining rigs and deploying low cost energy initiatives.
Copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and any amendments to those reports filed or furnished pursuant to Sections 13(a) or 15(d) of the Exchange Act, as well as other filings made with the SEC, are available free of charge through our website (www.mara.com under the “Investors” section).
Our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, as well as any amendments to those reports, are available free of charge through our website as soon as reasonably practicable after we file them with, or furnish them to, the SEC.
Halving The halving is an important part of the Bitcoin ecosystem, and it is closely watched by miners, investors, and other participants in the digital asset market. Each halving event has historically been associated with significant price movements in the value of bitcoin.
Each halving event has historically been associated with significant price movements in the value of bitcoin.
As of December 31, 2023, we operated approximately 210,000 mining rigs globally, with an installed and energized hash rate of approximately 25.2 and 24.7 exahashes per second, respectively. During the year ended December 31, 2023, we mined 12,852 bitcoin, an increase of 8,708 bitcoin, or 210.1%, over the prior year.
As of December 31, 2024, we operated approximately 400,000 mining rigs globally, with an energized hashrate of approximately 53.2 exahashes per second (“EH/s”). During the year ended December 31, 2024, we mined 9,430 bitcoin.
Many factors influence the price of Bitcoin, and potential increase or decrease in prices in advance of or following the future halving is unknown. Factors Affecting Profitability Market Price of Bitcoin Our business is heavily dependent on the price of bitcoin.
Many factors influence the price of Bitcoin, and potential increase or decrease in prices in advance of or following the future halving is unknown. At the beginning of the year, the reward for each solved block was equal to 6.25 bitcoin plus transaction fees.
Moreover, we are exploring novel sources of underutilized or wasted energy sources, which may reduce bitcoin production costs. Research and Development Our research and development (“R&D”) efforts play a critical role in driving our innovation and growth.
Initially, we expect to be the primary user of 2PIC. Research and Development Our research and development (“R&D”) efforts play a critical role in driving our innovation and growth.
The Company is committed to carbon neutrality and growing operations through predominately renewable energy sources. Our business is also active in Bitcoin-related projects related to the technological development of immersion, hardware, firmware, mining pools and side chains that use the blockchain cryptography.
This includes the sale of data center infrastructure, such as immersion-cooled systems, to third parties operating in the bitcoin ecosystem and the artificial intelligence (“AI”) and high-performance compute (“HPC”) sector. Our business is also active in bitcoin-related projects focused on the technological development of immersion, hardware, firmware, mining pools and side chains that leverage blockchain cryptography.
Historically, we have grown quickly to become one of the world’s largest publicly traded bitcoin mining companies. We achieved this milestone through an asset-light strategy, which involved deploying our bitcoin miners at third-party hosted sites.
We anticipate further growth of our hashrate in 2025 as we bring newly acquired bitcoin miners into operation. We have grown quickly to become a global leader in leveraging digital asset compute to support energy transformation. We achieved this milestone through an asset-heavy strategy, which involved deploying our bitcoin miners at third-party hosted sites and making strategic acquisitions throughout 2024.
We also believe that our ability to retain our workforce is dependent on our ability to foster an environment that is sustainably safe, respectful, fair, and inclusive of everyone, and promotes diversity, equity, and inclusion both inside and outside of our business. 13 Table of Contents RECENT DEVELOPMENTS On October 24, 2023, we commenced a new at-the-market offering program (the “2023 ATM”) with H.C.
Our goal is a long-term, growth-oriented career for each employee. We also believe that our ability to retain our workforce is dependent on our ability to foster an environment that is sustainably safe, respectful, fair, and inclusive of everyone.
As we expect this trend to continue, we will need to continue to grow our hash rate to compete in our dynamic and highly competitive industry. 7 Table of Contents Bitcoin “Halving” Events Bitcoin halving is a phenomenon that has historically occurred approximately every four years on the Bitcoin network.
As additional mining operators enter the market in response to increased demand for bitcoin, the Bitcoin blockchain’s network hashrate grows. Bitcoin “Halving” Events Bitcoin halving is a phenomenon that has historically occurred every 210,000 blocks or approximately every four years on the Bitcoin network.
However, we may also become subject to additional regulatory requirements on a state and local level in the geographies in which we operate, and as we strategically expand our operations into new areas. For additional discussion regarding our belief about the potential risks existing and future regulation pose to our business, see Part I, Item 1A.
For additional discussion of potential risks that existing and future regulation may pose to our business, see Part I, Item 1A. “Risk Factors” of this Annual Report.
Removed
ITEM 1. BUSINESS CORPORATE OVERVIEW Marathon is a digital asset technology company that is principally engaged in producing or “mining” digital assets with a focus on the Bitcoin ecosystem. Our strategic initiatives primarily focus on mining and holding bitcoin as a long-term investment.
Added
ITEM 1. BUSINESS CORPORATE OVERVIEW MARA is a global leader in leveraging digital asset compute to support the energy transformation, with operations on four continents and 16 data centers in North America, the Middle East, Europe and Latin America. We employ different strategies and structures (self-owned, joint ventures, and third-party hosted) to diversify risk across the organization.
Removed
Bitcoin is seeing increasing adoption, and, due to its limited supply, we believe it offers opportunity for appreciation in value and long-term growth prospects for our business.
Added
In prior years, we primarily used third party hosted sites to operate with an asset-light model. During the year, we decided to diversify our portfolio of assets and increased the proportion of our owned mining sites, exiting the year at approximately 70% owned capacity.
Removed
In addition to mining and holding bitcoin, from time to time we have explored, and we may in the future explore, opportunities to become more involved in businesses that expand or supplement those directly related to the self-mining of bitcoin as favorable market conditions and opportunities arise.
Added
Our core business is bitcoin mining, and we produce, or “mine,” bitcoin using one of the industry’s largest and most energy-efficient fleets of specialized computers while providing dispatchable compute as an optionality to the electric grid operators to balance electric demands on the grid.
Removed
For example, we have considered or engaged in owning and operating bitcoin mining facilities or data centers, selling proprietary software or technology to third parties operating in the Bitcoin ecosystem, offering advisory and consulting services to support bitcoin mining ventures in domestic and international jurisdictions, and generating electricity from renewable energy resources or methane gas capture to power bitcoin mining projects.
Added
We are exploring low cost energy initiatives through our owned power generation business, which focuses on disintermediating pipelines and powerlines by locating operations directly at energy sources, such as renewable energy sites and methane gas capture locations.
Removed
Currently, the reward for each solved block is equal to 6.25 bitcoin plus transaction fees and, as of December 31, 2023, the price of a bitcoin was $42,288. As additional mining operators enter the market in response to increased demand for bitcoin, the blockchain’s network hash rate grows.
Added
Over time, it is our expectation that this strategy will reduce production costs, improve operating margins, lower the weighted average cost of capital, and extend the duration of our bitcoin mining rigs and capacity.
Removed
The Bitcoin blockchain has undergone halving three times since its inception as follows: (1) on November 28, 2012 at block height 210,000; (2) on July 9, 2016 at block height 420,000; and (3) on May 11, 2020 at block height 630,000, when the reward was reduced to its current level of 6.25 bitcoin per block.
Added
Our low cost energy strategy focuses on reducing costs by utilizing stranded energy and exploring other opportunities, including selling excess capacity to offset costs and pursuing revenue generating initiatives that provide higher margins, thereby reducing our reliance on higher electricity costs.
Removed
Key activities and milestones throughout 2023 included the following: • In December 2023, we entered into a definitive agreement to acquire two currently operational bitcoin mining sites, totaling 390 megawatts of capacity, in Granbury, Texas and Kearney, Nebraska, to reduce the cost per coin of our current operations at these sites and further transition from the asset-light organization to one that manages a diversified and resilient portfolio of bitcoin mining operations.
Added
For example, subsequent to year end, we acquired an electric generating wind farm facility to utilize last-generation bitcoin mining rigs to provide an avenue for the hardware to continue operating profitably beyond its normal lifecycle. In addition, we are expanding our involvement in complementary businesses that align with our core competencies and strategic goals.
Removed
The transaction closed on January 12, 2024; 8 Table of Contents • We deployed capital to secure the most efficient Application Specific Integrated Circuit mining rigs (“ASICs”) through contracts that included price protection clauses which benefited the Company as ASICs prices declined throughout the second and third quarters of 2023; • We continued operations at a wind-powered site in McCamey, Texas and other smaller sites, which have increased our use of renewable sources of energy; • We secured additional hosting services to further our planned expansion of operations, entering into third-party hosting relationships with Applied Digital Corporation (“APLD”) to host S19XP mining rigs at sites in Texas and North Dakota; and • We increased our hash rate from 7.0 and 7.0 installed and energized exahashes per second, respectively, as of December 31, 2022 to 25.2 and 24.7 installed and energized exahashes per second, respectively, as of December 31, 2023.
Added
We believe we are the second largest holder of bitcoin among publicly traded companies. From time to time, we enter into forward or option contracts and/or lend bitcoin to increase yield on our bitcoin holdings.
Removed
The year ended December 31, 2023 was a year of adaptation, as we overcame several operational and financial headwinds that occurred during 2022, including: • Our primary mining facility in Hardin, Montana went offline after being damaged by a storm in mid-2022; • Delays in the energization of the McCamey, Texas site during the second and third quarters of 2022; • Compute North, our largest hosting partner, entered bankruptcy proceedings in September 2022; • A significant decline in the price of bitcoin, which resulted in impairments of our bitcoin holdings throughout 2022 and an impairment charge related to the value of our mining rigs and certain contracts during the fourth quarter of 2022; and • Challenging financial markets and macroeconomic conditions throughout 2022.
Added
On April 19, 2024, the bitcoin halving event occurred, reducing the previous block reward to 3.125 bitcoin per block. The transaction fee was not impacted by the halving. As of December 31, 2024, the price of bitcoin was $93,354. Factors Affecting Profitability Market Price of Bitcoin Our business is heavily dependent on the price of bitcoin.
Removed
Our primary focus in 2024 is to keep our current fleet of over 210,000 bitcoin mining rigs energized and running optimally while increasing our total operational hash rate. Our operational hash rate was 7.0 exahashes per second as of December 31, 2022 and was more than 24.7 exahashes per second as of December 31, 2023.
Added
Key activities and milestones during 2024 included the following: • We more than doubled our hashrate to 53.2 EH/s. • We acquired five operational data centers, totaling 812 megawatts (“MW”) of nameplate capacity, in Granbury and Garden City, Texas, Kearney, Nebraska, and Hannibal and Hopedale, Ohio. • We entered into an agreement to acquire a wind farm in Hansford County, Texas, with 240 MW of interconnection capacity and 114 MW of nameplate wind capacity to establish a behind-the-meter data center at low energy costs and provide an avenue for prior-generation bitcoin mining rigs to continue operating profitably beyond their normal lifecycle.
Removed
We anticipate further growth of our operational hash rate in 2024 as we bring newly acquired bitcoin miners into operation. We expect to increase our operational hash rate to approximately 35 to 37 exahashes per second in 2024. By December 31, 2025, we plan to reach 50 exahashes per second in operational hash rate.
Added
The acquisition closed subsequent to year end. • We launched a 25 MW micro data center operation in partnership with an oil and gas company, utilizing excess, flared natural gas from oil wellheads in Texas and North Dakota to power our bitcoin mining operations.
Removed
To support this growth, we have placed orders with multiple manufacturers for approximately 22 exahashes per second and hold the option to purchase an additional 23 exahashes per second. Additionally, we expect to expand our data center capacity through a portfolio approach with a healthy mix of asset-light, asset-heavy, and joint venture partnerships.
Added
This operation mitigates up to 99% of methane emissions and drives down our energy costs. • In Finland, we deployed two pilot projects to recycle heat from our operations, providing heat to communities with a total population of approximately 80,000 residents.
Removed
This approach saved us significant amounts of capital that would have otherwise been invested in data center infrastructure and allowed us to allocate more capital into revenue-generating assets, including bitcoin miners. During the year ended December 31, 2023 we shifted our strategy from an asset-light business model to a diversified and resilient portfolio approach directly supporting our bitcoin mining operations.
Added
These sites offset our production costs through heat sales while reducing the local communities’ reliance on high carbon emitting biomass through the use of hydro power, delivering renewable energy and more affordable heating to communities. • We launched a program to generate additional return by loaning bitcoin.
Removed
This approach involves managing a strategic mix of third-party hosted sites and self-owned and operated sites, which we believe will help the business weather market downturns by optimizing its cost structure. In January 2024, we acquired two data centers totaling 390 megawatts.
Added
At year end, we had approximately 10,374 bitcoin under loaned or collateral arrangements. • We grew bitcoin holdings (including loaned and collateralized bitcoin) by 197% to 44,893, which highlights our commitment to our core operations while also recognizing opportunities to purchase bitcoin strategically. 8 Table of Contents Our primary focus in 2025 is to keep our current fleet of over 400,000 bitcoin mining rigs energized and running optimally while increasing our total hashrate.
Removed
Following this acquisition, our operations are moving towards being more evenly split between third-party hosted and self-owned and operated sites. In 2023, we launched a joint venture in Abu Dhabi, United Arab Emirates, which operates two sites with a total capacity of 250 megawatts, of which we own 20%.
Added
During the year ended December 31, 2024 we announced a significant shift in our treasury policy and adopted a full holding onto bitcoin (“HODL”) strategy to retain all mined and purchased bitcoin for the foreseeable future.
Removed
These sites operate in one of the world’s most challenging environments, with summertime temperatures of approximately 115 degrees Fahrenheit and 98% humidity. We believe our state-of-the-art immersion technology deployed at these sites has resulted in the bitcoin mining rigs operating with minimal human intervention and need for repairs.
Added
The adoption of this strategy reflects our confidence in the long-term value of bitcoin and our belief that it is the world’s best treasury reserve asset.

… 32 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

69 edited+140 added−220 removed9 unchanged
Biggest changeIf a corresponding and proportionate increase in the price of bitcoin does not follow these anticipated halving events, the revenue from our mining operations would decrease, and we may not have an adequate incentive to continue mining and may cease mining operations altogether, which may adversely affect an investment in our securities and investors could suffer a complete loss of their investment.
Biggest changeIf we reduce or cease mining, our business would be materially harmed, and investors could suffer a complete loss of their investment. Further, reduced bitcoin mining incentives due to halving events may weaken network security and adversely affect our operations.
Since the Bitcoin network’s inception, changes to the Bitcoin network have been accepted by the vast majority of users and miners, ensuring that the Bitcoin network remains a coherent economic system.
Since the Bitcoin network’s inception, changes to the network have been accepted by the vast majority of users and miners, ensuring that the network remains a coherent economic system.
However, to the extent that any such incentives arise (e.g., a collective movement among miners or one or more mining pools forcing bitcoin users to pay transaction fees as a substitute for or in addition to the award of new bitcoins upon the solving of a block), actions of miners solving a significant number of blocks could delay the recording and confirmation of transactions on the blockchain.
However, to the extent that any such incentives arise (e.g., a collective movement among miners or one or more mining pools forcing blockchain users to pay transaction fees as a substitute for or in addition to the award of new bitcoin upon the solving of a block), actions of miners solving a significant number of blocks could delay the recording and confirmation of transactions on the blockchain.
In such a case, and if the modification is material and/or not backwards compatible with the prior version of Bitcoin network software, a fork in the blockchain could develop and two separate Bitcoin networks could result with one running the pre-modification software program and the other running the modified version (i.e., a second “Bitcoin” network).
In such a case, and if the modification is material or not compatible with the prior version of Bitcoin network software, a fork in the blockchain could develop and two separate Bitcoin networks could result with one running the pre-modification software program and the other running the modified version (i.e., a second “Bitcoin” network).
However, a developer or group of developers could potentially propose a modification to the Bitcoin network that is not accepted by a vast majority of miners and users, but that is nonetheless accepted by a substantial population of participants in the Bitcoin network.
However, a developer or group of developers could propose a modification to the Bitcoin network that is not accepted by a vast majority of miners and users, but that is nonetheless accepted by a substantial population of participants in the Bitcoin network.
Furthermore, increased public awareness and concern regarding environmental risks, including global climate change, may result in increased public scrutiny of our business and our industry, and our management team may divert significant time and energy away from our operations and towards responding to such scrutiny and reassuring our employees.
Furthermore, increased public awareness and concern regarding environmental risks, including global climate change, may result in increased public scrutiny of our business and our industry, and our management team may divert significant time and energy away from our operations and towards responding to such scrutiny.
To the extent a private key is lost, destroyed or otherwise compromised and no backup of the private key is accessible, we will be unable to access the digital assets and the private key will not be capable of being restored by the respective digital asset network.
To the extent a private key is lost, destroyed or otherwise compromised and no backup of the private key is accessible, we would be unable to access the digital assets and the private key would not be capable of being restored by the respective digital asset network.
A substantial majority of miners and Bitcoin users must consent to those software modifications by downloading the altered software or upgrade that implements the changes. If not, the changes do not become a part of the Bitcoin network.
A substantial majority of miners and Bitcoin users must consent to those software modifications by downloading the altered software or upgrade that implements the changes. Otherwise, the changes do not become a part of the Bitcoin network.
This transition could be accomplished either by miners independently electing to record in the blocks they solve only those transactions that include payment of a transaction fee or by the digital asset network adopting software upgrades that require the payment of a minimum transaction fee for all transactions.
This transition could be accomplished either by miners independently electing to 16 Table of Contents record in the blocks they solve only those transactions that include payment of a transaction fee or by the digital asset network adopting software upgrades that require the payment of a minimum transaction fee for all transactions.
If an actual or perceived breach of our security system occurs, the market perception of the effectiveness of our controls could be harmed, which could adversely affect an investment in our securities.
If an actual or perceived breach of our security systems occurs, the market perception of the effectiveness of our controls could be harmed, which could adversely affect an investment in our securities.
Additionally, intellectual property laws and regulations differ among states, and countries. Variations in patent laws and regulations or in interpretations of patent laws and regulations in the United States and other countries may diminish the value of our intellectual property and may change the impact of third-party intellectual property on our business.
Variations in patent laws and regulations (or in interpretations of patent laws and regulations) in the United States and other countries may diminish the value of our intellectual property and may change the impact of third-party intellectual property on our business.
Over the past two years, digital asset mining operations have evolved from individual users mining with computer processors, graphics processing units and first-generation mining rigs. Currently, new processing power brought onto the digital asset networks is predominantly added by “professionalized” mining operations. Professionalized mining operations may use proprietary hardware or sophisticated machines.
Over the past three years, digital asset mining operations have evolved from individual users mining with computer processors, graphics processing units and first-generation mining rigs. New processing power brought onto the digital asset networks is predominantly added by professionalized mining operations, which may use proprietary hardware or sophisticated machines.
Additionally, outside parties may attempt to fraudulently induce our employees to disclose sensitive information in order to gain access to our infrastructure. Despite our efforts, we may be unable to anticipate these techniques or implement adequate preventative measures since the hacking techniques used are often not recognized until launched against a target.
Additionally, outside parties may attempt to fraudulently induce our employees to disclose sensitive information in order to gain access to our systems or infrastructure. Despite our efforts, we may be unable to anticipate security breaches, including cyberattacks, or implement adequate preventative measures since the hacking techniques used often are not recognized until launched against a target.
The security system and operational infrastructure may be breached due to the actions of outside parties, error or malfeasance of an employee, or otherwise, and, as a result, an unauthorized party may obtain access to our private keys, data or bitcoins.
Our systems and operational infrastructure may be breached due to the actions of outside parties, error or malfeasance of an employee or otherwise, and, as a result, an unauthorized party may obtain access to our private keys, data or digital assets.
Investor advocacy groups, certain institutional investors, investment funds and other influential investors are also increasingly focused on ESG practices and in recent years have placed increasing importance on the non-financial impacts of their investments.
Companies across many industries are facing increasing scrutiny related to their ESG practices. Investor advocacy groups, certain institutional investors, investment funds and other influential investors are also increasingly focused on ESG practices and in recent years have placed increasing importance on the non-financial impacts of their investments.
To the extent we are unable to seek a corrective transaction to identify the third party which has received our digital assets through error or theft, we will be unable to revert or otherwise recover the impacted digital assets, and any such loss could adversely affect an investment in our securities.
To the extent we are unable to seek a corrective transaction to identify the third party which has received our digital assets through error or theft, we will be unable to revert or otherwise recover the impacted digital assets, and any such loss could adversely affect our business, results of operations and financial condition.
Further, we may be subject to investigation, administrative or court proceedings, and civil or criminal monetary fines and penalties as a result of any regulatory enforcement actions, all of which could harm our reputation and affect the value of our common stock. Changing environmental regulation and public energy policy may expose our business to new risks.
Further, we may be subject to investigation, administrative or court proceedings, and civil or criminal monetary fines and penalties as a result of any regulatory enforcement actions, all of which could harm our reputation and affect the value of our common stock. Changing environmental regulations and public energy policies could increase our costs and threaten our bitcoin mining operations.
As a result, any incorrectly executed digital asset transactions could adversely affect an investment in our securities. Digital asset transactions are not, from an administrative perspective, reversible without the consent and active participation of the recipient of the transaction or, in theory, control or consent of a majority of the processing power on that digital asset network.
Digital asset transactions are not, from an administrative perspective, reversible without the consent and active participation of the recipient of the transaction or, in theory, control or consent of a majority of the processing power on that digital asset network.
To the extent that any miners cease to record transactions in solved blocks, transactions that do not include the payment of a transaction fee will not be recorded on the blockchain until a block is solved by a miner who does not require the payment of transaction fees.
To the extent that any miners cease to record transactions in solved blocks, such transactions will not be recorded on the Bitcoin blockchain, until a block is solved by a miner who does not require the payment of transaction fees. Currently, there are no known incentives for miners to actively not record transactions in solved blocks.
The market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including the following: • changes in our industry including changes which adversely affect bitcoin and other digital assets; • changes in bitcoin pricing; • competitive pricing pressures; • our ability to obtain working capital financing; • additions or departures of key personnel; • sales of our common stock; • our ability to execute our business plan; • operating results that fall below expectations; • loss of any strategic relationship; • regulatory developments; and • economic and other external factors.
The market price of our common stock is highly volatile and may fluctuate widely due to factors beyond our control, including: • changes in our industry, particularly those affecting bitcoin and other digital assets; • variability in bitcoin pricing; • competitive pricing pressures; • our ability to obtain working capital financing; • additions or departures of key personnel; • sales of our common stock; • our ability to execute our business plan effectively; • operating results that fall below expectations; • loss of strategic relationships; • regulatory developments; and 28 Table of Contents • broader economic and external factors.
Accordingly, we cannot predict the scope of patents that may be granted to us, the extent to which we will be able to enforce our patents against third parties, or the extent to which third parties may be able to enforce their patents against us.
Accordingly, we cannot predict the scope of patents that may be granted to us, the extent to which we will be able to enforce our patents against third parties or the extent to which third parties may be able to enforce their patents against us. Developing and protecting new inventions and intellectual property is costly, time-consuming and uncertain.
Our future success depends on our ability to expand our organization to match the growth of our activities . As our operations grow, the administrative demands and scaling demands upon us will grow, and our success will depend upon our ability to meet those demands.
As our operations grow, the administrative demands and scaling demands upon us will grow, and our success will depend upon our ability to meet those demands.
Any loss of private keys relating to digital wallets used to store our digital assets could adversely affect an investment in our securities. Security threats to our business could result in, a loss of our digital assets, or damage to our reputation and our brand, each of which could adversely affect an investment in our securities.
Any loss of private keys relating to digital wallets used to store our digital assets could adversely affect an investment in our securities. Cybersecurity threats, including hacking and malware, could result in loss of digital assets, reputational damage, and business disruptions.
Variability in intellectual property laws may adversely affect our intellectual property position. Intellectual property laws, and patent laws and regulations in particular, have been subject to significant variability either through administrative or legislative changes to such laws or regulations or changes or differences in judicial interpretation, and it is expected that such variability will continue to occur.
Intellectual property laws, and patent laws and regulations in particular, have been subject to significant variability either through administrative or legislative changes to such laws or regulations or changes or differences in judicial interpretation, and we expect that such variability will continue to occur. Additionally, intellectual property laws and regulations differ among states and countries.
The temporary or permanent existence of forked blockchains could adversely impact an investment in our securities. Due to Bitcoin’s open-source project, any individual can download the Bitcoin network software and make any desired modifications, which are proposed to users and miners on the Bitcoin network through software downloads and upgrades, and typically posted to the Bitcoin development forum on GitHub.com.
Since the Bitcoin network is an open-source project, any individual can download the Bitcoin network software and make any desired modifications, which are proposed to users and miners on the Bitcoin network through software downloads and upgrades and typically posted to the Bitcoin development forum on GitHub.com.
Our loss of access to our private keys or a data loss relating to our digital assets could adversely affect an investment in our securities. Digital assets are controllable only by the possessor of both the unique public key and private key relating to the local or online digital wallet which hold the digital assets.
Digital assets are controllable only by the possessor of both the unique public key and private key relating to the local or online digital wallet which hold the digital assets.
Professionalized mining operations require: • the investment of significant capital for the acquisition of such hardware; • the leasing of operating space (often in data centers or warehousing facilities); • incurring of electricity costs; and • the employment of technicians to operate the mining farms.
Professionalized mining operations require: • significant capital investment tin specialized hardware; • leasing operating space (often in data centers or warehousing facilities); • substantial electricity consumption; and • employing technicians to operate the mining sites.
These demands include, but are not limited to, increased executive, accounting, management, legal services, staff support and general office services. We may need to hire additional qualified personnel to meet these demands, the cost and quality of which is dependent in part upon market factors outside of our control.
We may need to hire additional qualified personnel, including contractors, to meet these demands, the cost and quality of which is dependent in part upon market factors outside of our control.
Further, we will need to effectively manage the training and growth of our staff to maintain an efficient and effective workforce, and our failure to do so could adversely affect our business and operating results. Currently, we have limited personnel in our organization to meet our organizational and administrative demands.
Further, we will need to effectively manage the training and growth of our staff to maintain an efficient and effective workforce, and our failure to do so could adversely affect our business and operating results. We are highly dependent on the continued service of our executive team.
Once a transaction has been verified and recorded in a block that is added to the blockchain, an incorrect transfer of digital assets or a theft of digital assets generally will not be reversible, and we may not be capable of seeking compensation for any such transfer or theft.
Once a transaction has been verified and recorded in a block that is added to the blockchain, an incorrect transfer of digital assets or a theft of digital assets generally will not be reversible, and we may not be capable of seeking compensation for any such transfer or theft. 22 Table of Contents Although we regularly transfer digital assets to or from vendors, consultants and services providers, it is possible that, through computer or human error, or through theft or criminal action, such assets could be transferred in incorrect amounts or to unauthorized third parties.
Moreover, there is a risk that some bad actors will continue to attempt to use cryptocurrencies, including bitcoin, as a potential means of avoiding federally imposed sanctions, such as those imposed in connection with the Russian invasion of Ukraine. 29 Table of Contents We are unable to predict the nature or extent of new and proposed legislation and regulation affecting the cryptocurrency industry, or the potential impact of the use of cryptocurrencies by SDN or other blocked or sanctioned persons, which could have material adverse effects on our business and our industry more broadly.
We are unable to predict the nature or extent of new and proposed legislation and regulation affecting the cryptocurrency industry, or the potential impact of the use of cryptocurrencies by SDN or other blocked or sanctioned persons, which could have material adverse effects on our business and our industry more broadly.
Due to the unregulated nature and lack of transparency surrounding the operations of many bitcoin trading venues, they may experience fraud, security failures or operational problems, which may adversely affect the value of our bitcoin. Bitcoin trading venues are relatively new and, in some cases, unregulated.
The unregulated nature and lack of transparency of many bitcoin trading venues may expose us to fraud, security failures, and operational risks, potentially harming the value of our bitcoin holdings. Bitcoin trading venues are relatively new and, in some cases, operate with minimal regulation.
Risk Factor Summary Below is a summary of the principal factors that make an investment in our common stock speculative or risky. This summary does not address all of the risks we face.
Risk Factors Summary The following is a summary of the principal factors that make an investment in our securities speculative or risky, all of which are more fully described below in this section.
The cost to mine a bitcoin is independent of the then current price of bitcoin, so when prices are low, the cost per coin to mine may consume much of our available cash, which means that there is less capital with which to invest in future company growth.
The cost to mine a bitcoin is independent of the then current price of bitcoin, so when bitcoin prices are low, the cost per coin to mine may consume much of our available cash, limiting our ability to invest in expansion, upgrade mining equipment and infrastructure or fund other strategic initiatives.
We have engaged in, and in the future may engage in, strategic acquisitions and other arrangements that could disrupt our business, cause dilution to our stockholders, reduce our financial resources and harm our operating results.
Any such changes could materially and adversely affect our business, financial condition, and results of operations. We have engaged in, and may continue to engage in, strategic acquisitions and other transactions that could disrupt our business, dilute our stockholders, strain our financial resources and harm our operating results.
Both Marathon and each of our subsidiaries require certain financial, managerial and other resources, which could create challenges to our ability to successfully manage our subsidiaries and operations and impact our ability to assure compliance with our policies, practices and procedures.
MARA and our subsidiaries require certain financial, managerial and other resources, which could create challenges to our ability to successfully manage our subsidiaries and operations and impact our ability to assure compliance with our policies, practices and procedures. These demands include, but are not limited to, increased executive, technical, operations, accounting, legal, staff support and general office services.
Increased scrutiny and changing expectations from stockholders with respect to our environmental, social and governance (“ESG”) practices and the impacts of climate change may result in additional costs or risks. Companies across many industries are facing increasing scrutiny related to their ESG practices.
Even without regulatory changes, negative publicity regarding bitcoin mining’s environmental impact could damage our reputation and affect our financial condition. Increased scrutiny and changing expectations from stockholders with respect to our environmental, social and governance (“ESG”) practices and the impacts of climate change may result in additional costs or risks.
We have previously engaged in strategic transactions, including acquisitions of companies, miners, and bitcoin mining sites, such as our recent business acquisitions of two currently operational Bitcoin mining sites, totaling 390 megawatts of capacity, located in Granbury, Texas and Kearney, Nebraska, and, as part of our growth strategy, in the future, we may seek additional opportunities to grow our mining operations, including through purchases of miners, data centers and other facilities from other operating companies, including companies in financial distress.
As part of our growth strategy, we have pursued strategic transactions, including acquiring companies, miners and data centers. In the future, we may seek additional opportunities to expand our mining operations, including purchasing miners, data centers and other facilities, potentially from companies in financial distress.
Exercise or conversion of warrants and other convertible securities, along with new issuances of our common stock, will dilute our stockholder’s percentage of ownership. We have issued convertible securities, options and warrants to purchase shares of our common stock to our officers, directors, consultants and certain stockholders. In the future, we may grant additional options, warrants and convertible securities.
Investors should be aware that continued stock issuances may negatively impact the value of their holdings. The issuance, conversion, or exercise of convertible notes and other convertible securities, options, and warrants will dilute our stockholders' ownership. We have issued, and may continue to issue, convertible securities, options, and warrants to officers, directors, consultants, and certain stockholders.
Additionally, although we are not engaged in the business of investing, reinvesting, or trading in securities, and we do not hold ourselves out as being engaged in those activities, we could inadvertently be deemed an investment company under the Investment Act.
Although we do not currently engage in investing, reinvesting, or trading securities, and we do not hold ourselves out as an investment company, we could inadvertently be deemed one under the Investment Company Act. If we are unable to rely on an exclusion, we would be required to register with the SEC, which could impose additional financial and regulatory burdens.
The limited rights of legal recourse against us, and our lack of insurance protection expose us and our stockholders to the risk of loss of our digital assets for which no person is liable. Our digital assets are not insured.
The lack of legal recourse and insurance for our digital assets increases the risk of total loss in the event of theft or destruction. Our digital assets are not insured against theft, loss or destruction.
As a result, we recorded an impairment charge of $332.9 million on these assets during the quarter ended December 31, 2022, although operations were unaffected and continued throughout the period. Any future decrease in the value of bitcoin could cause us to record additional impairments in the value of our current and future assets.
As a result, we recorded a $332.9 million impairment charge for the quarter ended December 31, 2022. Similar market downturns in the future could force us to record further impairments on our current and future assets, which could negatively impact our financial condition. Our ability to operate profitably depends heavily on bitcoin prices.
Our business could be harmed by prolonged power and internet outages, shortages, or capacity constraints. Our operations require a significant amount of electrical power and access to high-speed internet to be successful.
Prolonged power and internet outages, shortages or capacity constraints could harm our business. Our mining operations rely on a significant amount of electricity and high-speed internet access. The success of any current or future mining site depends on securing sufficient, cost-effective power.
Furthermore, there are many bitcoin trading venues which do not provide the public with significant information regarding their ownership structure, management teams, corporate practices and regulatory compliance. As a result, the marketplace may lose confidence in bitcoin trading venues, including prominent exchanges that handle a significant volume of bitcoin trading.
Many exchanges do not provide the public with significant information about their ownership, management, corporate practices, or regulatory compliance. As a result, confidence in bitcoin trading venues could decline, especially if prominent exchanges suffer fraud, business failures, cyberattacks, or government-imposed restrictions.
If our stockholders sell substantial amounts of our common stock in the public market upon the expiration of any statutory holding period or lockup agreements, under Rule 144, or issued upon the exercise of outstanding warrants or other convertible securities, it could create a circumstance commonly referred to as an “overhang” and in anticipation of which the market price of our common stock could fall.
If a significant number of our stockholders sell shares in the public market following the expiration of statutory holding periods or lock-up agreements, under Rule 144, or after the exercise of outstanding warrants or convertible securities, it could create an “overhang” effect. This anticipated sell-off could depress our stock price, regardless of actual sales activity.
Furthermore, as our assets grow, we may become a more appealing target for security threats such as hackers and malware. We rely on third-party custody providers’ 100% cold-storage custody solutions held in a purpose-built physically secure environments based on established, industry best practices to safeguard digital assets from theft, loss, destruction or other issues relating to hackers and technological attack.
As our digital asset holdings grow, we may become a more attractive target for cybercriminals, further increasing our risk exposure. We rely on third-party custody providers’ solutions to safeguard digital assets from theft, loss, destruction or other issues relating to cyberattacks.
You should carefully consider the risks, factors, and uncertainties described below, together with the other information contained in this Annual Report, as well as the risk, factors, uncertainties, and other information we disclose in other filings we make with the SEC before making an investment decision regarding our securities.
ITEM 1A. RISK FACTORS Described below are certain risks to our business and the industry in which we operate. You should carefully consider the risks described below, together with the financial and other information contained in this Annual Report and in our other public disclosures.
In addition to mining and holding bitcoin, and such related acquisitions, we have explored, and we may in the future explore, opportunities to become more involved in businesses that expand or supplement those directly related to the self-mining of bitcoin as favorable market conditions and opportunities arise.
Beyond bitcoin mining and related acquisitions, we have explored, and may continue to explore, opportunities in adjacent or complementary businesses as market conditions allow.
The exercise, conversion or exchange of options, warrants or convertible securities, including for other securities, will dilute the percentage ownership of our stockholders. The dilutive effect of the exercise or conversion of these securities may adversely affect our ability to obtain additional capital.
Additionally, we have issued convertible notes to certain institutional investors in private offerings. The exercise, conversion, or exchange of these instruments, including for other securities, will dilute existing stockholders’ ownership percentages. This dilution may negatively impact our ability to obtain additional capital.
(“FTX”) in November 2022 and various bitcoin company-related bankruptcies and restructurings, led to a material decline in the fair value of our mining rigs and deposits for future mining rig purchases during that period.
This decline, combined with negative market sentiment following the collapse of FTX Trading Ltd. in November 2022 and the bankruptcies and restructurings of multiple digital asset companies, caused a material decline in the fair value of our mining rigs and deposits for future mining rig purchases.
A change in regulatory or financial accounting standards could result in the necessity to change our accounting methods and restate our financial statements. Such a restatement could adversely affect the accounting for our newly mined cryptocurrency rewards and more generally negatively impact our business, prospects, financial condition and results of operations.
Limited precedent exists for the financial accounting of bitcoin and other cryptocurrency assets. Future changes in regulatory or accounting standards could require us to alter our accounting practices and restate financial statements, potentially affecting how we account for newly mined cryptocurrency rewards. Such changes could materially and adversely impact our business, financial condition, and operating results.
The lack of guaranteed financial incentive for contributors to maintain or develop the Bitcoin network and the lack of guaranteed resources to adequately address emerging issues with the Bitcoin network may reduce incentives to address the issues adequately or in a timely manner.
The Bitcoin network protocol is not sold, and contributors generally are not compensated for maintaining and updating the Bitcoin network protocol. Without guaranteed financial incentives, there may be insufficient resources to address emerging issues, upgrade security or implement necessary improvements in a timely manner.
If regulatory changes or interpretations of our activities require us to register as a money services business (“MSB”) under the regulations promulgated by FinCEN under the authority of the U.S. Bank Secrecy Act, we may be required to register and comply with such regulations.
Changes in regulatory interpretations could require us to register as a money services business or money transmitter, leading to increased compliance costs or operational shutdowns. If regulatory changes or interpretations require us to register as a money services business with FinCEN under the U.S.
In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.
Additionally, securities markets have historically experienced substantial price and volume fluctuations unrelated to specific companies' performance. Such market fluctuations could materially and adversely affect the market price of our common stock. Our ongoing at-the-market stock issuances contribute to stockholder dilution and may intensify due to our HODL strategy.
Such additional registrations may result in extraordinary, non-recurring expenses, thereby materially and adversely impacting an investment in our common stock. If we determine not to comply with such additional regulatory and registration requirements, we may seek to cease certain of our operations. Any such action may adversely affect an investment in our securities.
Compliance with these additional regulatory requirements could result in substantial, non-recurring expenses, adversely affecting an investment in our securities. If we determine not to comply with such regulations, we may be forced to cease certain operations, which could negatively impact our investors. Changes in tax laws or IRS guidance regarding bitcoin’s classification could negatively impact our business and stockholders.
The holders of these securities may be expected to exercise or convert such options, warrants and convertible securities at a time when it would be able to obtain additional equity capital on terms more favorable than such securities or when our common stock is trading at a price higher than the exercise or conversion price of the securities.
Holders of these securities may choose to exercise or convert them at times when we could otherwise secure equity capital on more favorable terms or when our common stock is trading above the exercise or conversion price. Uncertainty in accounting standards for bitcoin and other cryptocurrencies may lead to financial restatements and business disruptions.
To the extent investors view our common stock as linked to the value of our bitcoin holdings, such a negative perception of bitcoin trading venues could have a material adverse effect on the market value of our common stock.
A lack of stability in the broader bitcoin market or the closure of key trading venues could lead to increased price volatility. If investors view our common stock as linked to our bitcoin holdings, these market disruptions could negatively impact the market value of our stock.
To the extent that digital assets including bitcoins and other digital assets we own or may own are deemed by the SEC to fall within the definition of a security, we may be required to register and comply with additional regulation under the Investment Act, including additional periodic reporting and disclosure standards and requirements and our registration as an investment company.
If the SEC or other regulators determine that bitcoin or other digital assets we hold qualify as securities, we may be required to register as an investment company under the Investment Company Act. This classification would subject us to additional periodic reporting, disclosure requirements, and regulatory compliance obligations, significantly increasing our operational costs.
Similarly, when prices are low, our profitability is decreased on a dollar-for-dollar basis correlated to the then price of bitcoin. Given the volatility of bitcoin, these factors render us unable to accurately predict in advance what our growth plans may be and accurately forecast any revenue and profitability projections for any reporting period.
Given the volatility of bitcoin prices, we are unable to accurately predict our future growth trajectory or reliably forecast our revenue and profitability for any given reporting period. Our ability to expand our operations depends on our assumptions regarding bitcoin’s future price.
We safeguard the private keys relating to our digital assets by relying on three custody providers, including New York Digital Investment Group LLC’s (“NYDIG”), relying on 100% cold-storage custody solutions held in purpose-built physically-secure environments based on established, industry best practices to safeguard digital assets from theft, loss, destruction or other issues relating to hackers and technological attack.
We safeguard the private keys relating to our digital assets by relying on four custody providers, including New York Digital Investment Group LLC (“NYDIG”).
If regulatory changes or interpretations require the regulation of bitcoins under the Securities Act and Investment Company Act by the SEC, we may be required to register and comply with such regulations. To the extent that we decide to continue operations, the required registrations and regulatory compliance steps may result in extraordinary, non-recurring expenses to us.
Regulatory changes or interpretations that classify bitcoin as a security under the Securities Act of 1933, as amended (the “Securities Act”) or Investment Company Act of 1940, as amended (the “Investment Company Act”), could require us to register and comply with additional regulations. Compliance with these requirements could impose extraordinary, non-recurring expenses on our business.
If our digital assets are lost, stolen or destroyed under circumstances rendering a party liable to us, the responsible party may not have the financial resources sufficient to satisfy our claim.
If our digital assets are lost under circumstances that render another party liable, there is no guarantee that the responsible party will have the financial resources to compensate us. As a result, we and our stockholders could face significant financial losses.
Our ability to grow through future acquisitions will depend on the availability of, and our ability to identify, suitable acquisition and investment opportunities at an acceptable cost, our ability to compete effectively to attract those opportunities and the availability of financing to complete acquisitions.
Our ability to grow through acquisitions depends on several factors, including the availability of suitable opportunities at acceptable costs, our ability to compete effectively to attract those opportunities and access to financing. Acquisitions may require us to issue common stock, thereby diluting existing stockholders, or take on liabilities from acquired businesses.
As an alternative to fiat currencies that are backed by central governments, digital assets such as bitcoin, which are relatively new, are subject to supply and demand forces based upon the desirability of an alternative, decentralized means of buying and selling goods and services. It is unclear how such supply and demand will be impacted by geopolitical events.
Bitcoin is an alternative to fiat currencies that are backed by central governments, but its value is highly dependent on supply and demand. It is unclear how global geopolitical and economic crises will affect the adoption and valuation of digital assets. However, such crises may lead to large-scale acquisitions or sales of digital assets, causing significant price volatility.
The price of bitcoin is extremely volatile and in fiscal 2023 the price range of bitcoin was between approximately $16,600 and $42,300.
Risks Related to Our Business Bitcoin price volatility may affect our ability to effectively manage our growth plans and profitability. The market price of bitcoin is extremely volatile, and in fiscal 2024 the price range of bitcoin was between approximately $39,000 and $106,000.
Our operations and ability to mine bitcoin could be adversely affected if operators we rely on to operate our bitcoin miners experience general incompetence in performing their duties, experience financial difficulties or bankruptcy, or otherwise cannot operate our bitcoin miners in accordance with their contractual obligations.
Our reliance on third-party hosting providers for bitcoin mining operations exposes us to financial and operational risks. We rely on third-party hosting providers to power a portion of our mining rigs. If these providers experience financial difficulties, including bankruptcy, or fail to meet their contractual obligations, our ability to mine bitcoin could be significantly impacted.
Therefore, if the price of bitcoin is not sufficiently high to allow us to fund our hash rate growth through new miner acquisitions and if we are otherwise unable to access additional capital to acquire these miners, our hash rate may stagnate and we may fall behind our competitors.
However, as demand for mining equipment grows, the cost of acquiring and deploying new miners increases, which could limit our ability to scale. If we are unable to access capital to acquire additional miners, our hashrate may stagnate and we may fall behind our competitors.
We are highly dependent on the continued services of our small team of executives. We are dependent upon the efforts and services of our small executive team. While we have a preliminary plan for succession of certain key executive, the loss of any one of our key executives could have an adverse effect on our operations.
We depend upon the efforts, experience, diligence, skill and network of business contacts of our senior management team, and our success will depend on their continued service. The departure of any of our executive officers or key personnel could have a material adverse effect on our business and results of operations.
Digital assets such as bitcoin, that may be used, among other things, to buy and sell goods and services are a new and rapidly evolving industry. The growth of the digital asset industry in general, and the digital asset networks of bitcoin in particular, are highly uncertain.
The adoption and long-term viability of digital asset networks is uncertain, and a decline in their growth or acceptance could negatively impact our business and the value of our stock. Bitcoin and other digital assets are part of a new and rapidly evolving industry.
Removed
ITEM 1A. RISK FACTORS Certain factors may have a materially adverse effect on our business, financial condition, and results of operations, including the risk, factors, and uncertainties described under this Part I, Item 1A, and elsewhere in this Annual Report.
Added
If any of the following risks actually occurs, our business, financial condition, results of operations, cash flows and prospects could be materially and adversely affected.
Removed
This is not an exhaustive list, and there are other factors that may be applicable to our business that are not currently known to us or that we currently do not believe are material.
Added
As a result, our future results could differ materially from historical results and from guidance we may provide regarding our expectations of our future financial performance, and the trading price of our common stock could decline.
Removed
Any of these risks could have an adverse effect on our business, financial condition, operating results, or prospects, which could cause the trading price of our common stock to decline, and you could lose part or all of your investment.
Added
This summary should be read in conjunction with the full description of “Risk Factors” in this section and should not be relied upon as an exhaustive summary of the material risks facing our business.
Removed
Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below and should be carefully considered, together with other information included in this Annual Report.
Added
In addition to the following summary and the information in this section, you should consider the other information contained in this Annual Report before investing in our securities.
Removed
Risks Related to Our Business • Bitcoin prices are very volatile and this may affect our ability to effectively manage growth plans and our profitability; 14 Table of Contents • If we fail to grow our hash rate, we may be unable to compete, and our results of operations could suffer. • Fluctuations in the price of bitcoin may significantly influence the market price of our bitcoin holdings and therefore the price of our common stock; • Further significant disruptions in the crypto asset markets, such as those experienced in the second half of 2022, may cause further material impairment of the value and use of our mining rigs; • Political or economic crises may motivate large-scale sales of digital assets, which could result in a reduction in some or all digital assets’ values and adversely affect an investment in our securities; • Bitcoin is subject to halving and as such the reward for successfully solving a block will halve several times in the future and its value may not adjust to compensate us for the reduction in the rewards we receive from our mining efforts, which could cause us to cease our mining operations altogether and investors could suffer a complete loss of their investment; • Security threats to our business could result in a loss of our digital assets, or damage to our reputation and brand, each of which could adversely affect an investment in our securities; • The limited rights of legal recourse against us, and our lack of insurance protection exposes us and our stockholders to the risk of loss of our digital assets for which no person is liable; • We rely on third-party hosting, and as such, our operations could be adversely affected by the actions or inactions of such third-parties.
Added
Risks Related to Our Business • Bitcoin price volatility may affect our ability to effectively manage our growth plans and profitability; • Regulatory, commercial, and technical uncertainties may influence bitcoin prices; • Failure to increase our hashrate may reduce our competitiveness and negatively impact our financial performance; • Our HODL strategy exposes us to market volatility and liquidity risks; • Significant disruptions in the cryptocurrency markets, like those in late 2022, could materially impair the value of our mining rigs, and prolonged low bitcoin prices could force us to idle mining rigs; • The adoption and long-term viability of digital asset networks is uncertain, and a decline in their growth or acceptance could negatively impact our business and the value of our stock; • We face risks related to technological obsolescence, vulnerability of the global supply chain for cryptocurrency hardware, potential trade restrictions and difficulty in obtaining new hardware, which may have a material adverse effect on our business; 13 Table of Contents • We may experience liquidity constraints and need additional capital, which may not be available to us on favorable terms, or at all; • Our bitcoin lending arrangements expose us to risks of borrower default, operational failures and cybersecurity threats; • The U.S. political and economic environment could materially impact our business operations and financial performance, and uncertainty surrounding the potential legal, regulatory and policy changes by the new U.S. presidential administration may directly affect us and the global economy; • We have engaged in, and may continue to engage in, strategic acquisitions and other transactions that could disrupt our business, dilute our stockholders, strain our financial resources and harm our operating results; • Geopolitical and economic crises could lead to increased uncertainty, large-scale selloffs of digital assets and a decline in bitcoin’s value, negatively impacting our business and stock price; and • The lack of legal recourse and insurance for our digital assets increases the risk of total loss in the event of theft or destruction.
Removed
Additionally, third-party hosting, among other things, often requires us to give the hosting company a first lien on the mining rigs installed on the site and creates business risk for us. • We have identified material weaknesses in our internal control over financial reporting and may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements of our financial statements or cause us to fail to meet periodic reporting obligations; and • We have unresolved Staff comments which could result in restated financial statements.

… 349 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+4 added−2 removed5 unchanged
Biggest changeThe Task Force meets at least quarterly to discuss matters involving cybersecurity risks. The Task Force ultimately provides information to our Audit Committee regarding its activities, including those related to cybersecurity risks. The Audit Committee also receives a briefing and continuing education from a member of the Task Force relating to our cyber risk management program at least annually.
Biggest changeThe ISAT oversees our information security program and our strategy, including management’s implementation of cybersecurity risk management. The ISAT meets at least semi-annually to discuss matters involving cybersecurity risks. The ISAT ultimately provides information to our Risk and Audit Committee regarding its activities, including those related to cybersecurity risks.
Our cybersecurity risk management program includes: • Identifying cybersecurity risks that could impact our facilities, third-party vendors/partners, operations, critical systems, information, and broader enterprise IT environment.
Our cybersecurity risk management program includes: • Identifying cybersecurity risks that could impact our facilities, third-party vendors/partners, operations, critical systems, information, and broader enterprise information technology (“IT”) environment.
We continue to make investments in information security resources to mature, expand, and adapt our capabilities to address emerging cybersecurity risks and threats. The information security organization is overseen by the Information Security Advisory Team, further detailed under the caption “Cybersecurity Governance” below.
We continue to make investments in information security resources to mature, expand, and adapt our 29 Table of Contents capabilities to address emerging cybersecurity risks and threats. The information security organization is overseen by the Information Security Advisory Team (the “ISAT”), further detailed under the caption “Cybersecurity Governance” below.
While we face a number of ongoing cybersecurity risks in connection with our business, such risks have not materially affected us to date, including our business strategy, results of operations, or financial condition. 35 Table of Contents Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated the oversight of cybersecurity and other information technology risks to the Board’s Audit Committee.
While we face a number of ongoing cybersecurity risks in connection with our business, such risks have not materially affected us to date, including our business strategy, results of operations, or financial condition.
Removed
As part of this oversight, we created the Information Security Advisory Team (the “Task Force”). The Task Force is comprised of senior managers and executives from multiple departments within the Company, including the IT, finance, legal and operations departments. The Task Force oversees our information security program and our strategy, including management’s implementation of cybersecurity risk management.
Added
In addition, we periodically engage third-party consultants and providers to assist us in assessing, testing, enhancing and monitoring our cybersecurity risk management programs and responding to any incidents. These third parties work in conjunction with the ISAT in an effort to continuously improve our cybersecurity risk posture. Examples of third-party actions include risk assessments and penetration testing of our systems.
Removed
The Task Force is responsible for notifying the Audit Committee of material cybersecurity incidents.
Added
Cybersecurity Governance Our Board of Directors (the “Board”) considers cybersecurity risk as part of its risk oversight function and has delegated the oversight of cybersecurity and other IT risks to the Board’s Risk and Audit Committee. As part of this oversight, we created the ISAT.
Added
The ISAT is comprised of cybersecurity consultants and senior managers and executives from multiple functions within MARA, including IT, finance, legal, internal audit and operations. Members of the ISAT have extensive professional experience in cybersecurity, software engineering and information technology and hold industry-recognized certifications, including Certified Information Systems Security Professional (CISSP) and Systems Security Certified Practitioner (SSCP).
Added
The Risk and Audit Committee also receives a briefing and continuing education from a member of the ISAT relating to our cybersecurity risk management program at least annually. The ISAT is responsible for notifying the Risk and Audit Committee of material cybersecurity incidents. 30 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

1 edited+1 added−2 removed0 unchanged
Biggest changeITEM 2. PROPERTIES Our corporate headquarters are located in Fort Lauderdale, Florida, where we lease office space. As of December 31, 2023, we leased additional office space at locations throughout the United States.
Biggest changeITEM 2. PROPERTIES As of December 31, 2024, we leased office space in Fort Lauderdale, Florida, which serves as our corporate headquarters. We lease additional office space throughout the United States. To conduct our digital asset operations, we also own and lease facilities throughout the United States.
Removed
We also lease facilities throughout the United States to support our bitcoin mining operations and have recently entered into definitive agreements to acquire two currently operational bitcoin mining sites in Granbury, Texas and Kearney, Nebraska.
Added
We believe our facilities are appropriately utilized and suitable to meet the requirements of our present and foreseeable future operations to conduct our business. Refer to Part I, Item 1. Business, “Operations” included in this Annual Report for further information, including locations and descriptions of our significant properties, which information is incorporated herein by reference.
Removed
The following table provides details regarding our most significant properties as of December 31, 2023, all of which are leased: Site Location Mega-watts Energized Exahash Lease Expiration McCamey, Texas 216 7.7 August 2027 Garden City, Texas 100 4.5 July 2027 Ellendale, North Dakota 180 7.8 July 2027 Jamestown, North Dakota 40 1.4 December 2027

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

0 edited+2 added−31 removed0 unchanged
Removed
ITEM 3. LEGAL PROCEEDINGS Compute North Bankruptcy On September 22, 2022, Compute North Holdings, Inc. (currently doing business as Mining Project Wind Down Holdings, Inc.) and certain of its affiliates (collectively, “Compute North”) filed for Chapter 11 bankruptcy protection with the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”).
Added
LEGAL PROCEEDINGS Other than as disclosed in Note 19 - Legal Proceedings in the notes to our Consolidated Financial Statements included in this Annual Report, we are presently not a party to any material litigation or regulatory proceeding and are not aware of any pending or threatened litigation or regulatory proceeding against us which, individually or in the aggregate, could have a material adverse effect on our business, operating results, financial condition or cash flows.
Removed
Compute North provided operating services to us and hosted our mining rigs at multiple facilities. We delivered miners to Compute North, which then installed the mining rigs at those facilities, operated and maintained the mining rigs, and provided energy to keep the miners operating.
Added
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 31 Table of Contents PART II
Removed
During the course of the Chapter 11 cases, Compute North sold substantially all of its assets in a series of 363 sale transactions, including Compute North’s ownership interests in non-debtor entities that own or partially-own facilities that house our miners.
Removed
On November 23, 2022, we and certain of our affiliates timely filed proofs of claim asserting various claims against Compute North, including: (i) claims arising under hosting agreements between us and Compute North LLC; (ii) claims arising under that certain Senior Promissory Note, dated as of July 1, 2022, by and between us, as Lender, and Compute North LLC, as Borrower; (iii) claims arising from the breach of a letter of intent between us and Compute North LLC; and (iv) claims for daily lost revenue, profits and other damages against Compute North. 36 Table of Contents On February 9, 2023, the Bankruptcy Court approved a settlement stipulation between us and Compute North, pursuant to which the proofs of claim filed by us and certain of its affiliates were resolved, and we received a single allowed unsecured claim against Compute North LLC in the amount of $40.0 million and its preferred equity interests in Compute North in the amount of 39,597 shares of Series C Preferred Stock was confirmed.
Removed
In exchange, we agreed to vote in favor of Compute North’s Chapter 11 plan. On February 16, 2023, the Bankruptcy Court confirmed Compute North’s Chapter 11 plan (the “Plan”), pursuant to which Compute North will liquidate its remaining assets and distribute proceeds arising therefrom in accordance with the waterfall provision set forth in the Plan.
Removed
In a disclosure statement filed on December 19, 2022, Compute North projected that holders of allowed general unsecured claims could recover anywhere between 8% to 65% on their claims, while holders of preferred equity interests are expected to recover nothing on their interests. The Plan became effective March 31, 2023.
Removed
At this time, we cannot predict the quantum of its potential recovery on account of its allowed general unsecured claim and preferred equity interests or the timing of when it would receive any distributions under the Plan on account of its claims and interests.
Removed
Derivative Complaints On February 18, 2022, a shareholder derivative complaint was filed in the United States District Court for the District of Nevada, against current and former members of our board of directors (the “Board”) and senior management.
Removed
The complaint is based on allegations substantially similar to the allegations in the December 2021 putative class action complaint, related to our disclosure of an SEC investigation we previously made on November 15, 2021. On March 4, 2022, we were served the complaint. On April 4, 2022, the defendants moved to dismiss the complaint.
Removed
On May 5, 2022, a second shareholder derivative complaint was filed in the United States District Court for the District of Nevada, against current and former members of our Board and senior management. The second shareholder derivative complaint is based on allegations substantially similar to the allegations in the February 18, 2022 derivative complaint.
Removed
On May 11, 2022, the defendants moved to dismiss the second shareholder derivative complaint. On June 1, 2022, the Court entered an order consolidating the two derivative actions. A June 13, 2022, scheduling order provided for plaintiffs to file a consolidated complaint and for renewed motions to dismiss the consolidated shareholder derivative complaint.
Removed
On November 22, 2022, before a consolidated complaint was due, plaintiffs voluntarily dismissed both actions without prejudice. On November 23, 2022, both actions were closed.
Removed
On June 22, 2023, a shareholder derivative complaint was filed in the Circuit Court of the 17th Judicial Circuit for Broward County, Florida, against current members of our Board and senior management, alleging claims for breach of fiduciary duty and unjust enrichment based on allegations substantially similar to the allegations in the March 30, 2023 putative class action complaint.
Removed
On July 8, 2023, a second shareholder derivative complaint was filed in the United States District Court for the District of Nevada, against current and former members of our Board and senior management, alleging claims under Sections 14(a), 10(b), and 21D of the Exchange Act, and for breach of fiduciary duty, unjust enrichment, and waste of corporate assets, based on allegations substantially similar to the allegations in the March 30, 2023 putative class action complaint.
Removed
On July 12, 2023, a third shareholder derivative complaint was filed in the United States District Court for the District of Nevada, against current and former members of our Board and senior management, alleging claims under Section 14(a) of the Exchange Act and for breach of fiduciary duty, based on allegations substantially similar to the allegations in the March 30, 2023 putative class action complaint.
Removed
On July 13, 2023, a fourth shareholder derivative complaint was filed in the Circuit Court of the 17th Judicial Circuit for Broward County, Florida, against current members of our Board and senior management, alleging claims for breach of fiduciary duty, unjust enrichment, and waste of corporate assets, based on allegations substantially similar to the allegations in the March 30, 2023 putative class action complaint.
Removed
On August 14, 2023, the two derivative actions pending in the United States District Court for the District of Nevada were consolidated (the “Nevada Derivative Action”).
Removed
On October 16, 2023, the parties to the derivative actions pending in the Circuit Court of the 17th Judicial Circuit for Broward County, Florida filed an agreed order to stay both actions pending completion of the Nevada Derivative Action.
Removed
Putative Class Action Complaint 37 Table of Contents On March 30, 2023, a putative class action complaint was filed in the United States District Court for the District of Nevada, against us and present and former senior management, alleging claims under Section 10(b) and 20(a) of the Exchange Act arising out of our announcement of accounting restatements on February 28, 2023.
Removed
The defendants’ time to respond has been extended until after the appointment of a lead plaintiff. Information Subpoena On October 6, 2020, we entered into a series of agreements with multiple parties to design and build a data center for up to 100-megawatts in Hardin, Montana.
Removed
In conjunction therewith, we filed a Current Report on Form 8-K on October 13, 2020, which discloses that, pursuant to a Data Facility Services Agreement, we issued 6,000,000 shares of restricted common stock, in transactions exempt from registration under Section 4(a)(2) of the Securities Act.
Removed
During the quarter ended September 30, 2021, we, and certain of our executives, received a subpoena to produce documents and communications concerning the Hardin, Montana data center facility described in our Current Report on Form 8-K dated October 13, 2020.
Removed
We understand that the SEC may be investigating whether or not there may have been any violations of the federal securities law. We are cooperating with the SEC. Ho v. Marathon On January 14, 2021, Plaintiff Michael Ho (“Plaintiff” or “Ho”) filed a Civil Complaint for Damages and Restitution (the “Complaint”) against us and ten Doe Defendants.
Removed
The Complaint alleges six causes of action against us: 1) Breach of Written Contract; 2) Breach of Implied Contract; 3) Quasi-Contract; 4) Services Rendered; 5) Intentional Interference with Prospective Economic Relations; and 6) Negligent Interference with Prospective Economic Relations, which is the one plead against “all Defendants” and is most likely to involve later named defendants.
Removed
The claims arise from the same set of facts where Ho alleges that we profited from commercially sensitive information he shared with us and then we refused to compensate him for his role in securing the acquisition of a supplier of energy for us.
Removed
On February 22, 2021, we responded to the Complaint with a general denial and the assertion of applicable affirmative defenses. Then, on February 25, 2021, we removed the action to the United States District Court in the Central District of California, where the action remains pending. We filed a motion for summary judgment/adjudication of all causes of action.
Removed
On February 11, 2022, the Court granted the motion and dismissed Ho’s 2nd, 5th and 6th causes of action. Discovery is substantially closed. The Court held a pre-trial conference on February 24, 2022, where it vacated the March 3, 2022 trial date and ordered the parties to meet and confer on a new trial date.
Removed
The Court discussed the various theories of damages maintained by the parties.
Removed
In its ruling on the summary judgment motion and at the pre-trial conference on February 24, 2022, the Court noted that a jury is more likely to accept $0.2 million as an appropriate damages amount if liability is found, as opposed to the various theories espoused by Ho that result in multi-million-dollar recoveries.
Removed
Due to outstanding issues of fact and law, it is impossible to predict the outcome at this time; however, after consulting legal counsel, we are confident that we will prevail in this litigation, since we did not have a contract with Mr.
Removed
Ho, and he did not disclose any commercially sensitive information under any mutual nondisclosure agreement that was used to structure any joint venture with energy providers. The trial is likely to commence on or around April 8, 2024. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 38 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 4. Mine Safety Disclosures 38 PART II. Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 39 Item 6. Reserved 39 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 40 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 59 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 31 PART II. Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 32 Item 6. [Reserved] 32 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 33 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 48 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+2 added−0 removed0 unchanged
Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is currently listed on Nasdaq under the symbol “MARA.” Holders As of December 31, 2023, there w ere 49 holders of record of 242,829,391 shares of our common stock.
Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is currently listed on Nasdaq under the symbol “MARA.” Holders As of December 31, 2024, there w ere approximately 45 holders of record of our common stock.
Dividends We have never paid cash dividends on our capital stock and have no current plans to do so in the foreseeable future. Issuer Repurchases of Equity Securities None.
Dividends We have never paid cash dividends on our capital stock and have no current plans to do so in the foreseeable future.
Added
Performance Graph The following graph compares a cumulative five-year period from December 31, 2019 to December 31, 2024, of total return for our common stock (MARA), the Nasdaq Composite Index, our self-constructed Peer Group Index and the S&P 600 Small Cap Index assuming an aggregate initial investment in each of $100 on December 31, 2019.
Added
Such returns are based on historical results and are not intended to suggest future performance. Our self-constructed Peer Group Index consists of members of our peer group with available publicly traded market data as of, and subsequent to, December 31, 2019, and consists of: Bitfarms Ltd. (BITF), CleanSpark, Inc. (CLSK), HIVE Digital Technologies Ltd. (HIVE) and Riot Platforms, Inc. (RIOT).

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

63 edited+98 added−186 removed1 unchanged
Biggest changeThe Company relies primarily on its Consolidated Financial Statements to understand, manage, and evaluate its financial performance and use the non-GAAP financial measures only supplementally. 42 Table of Contents RESULTS OF OPERATIONS Year ended December 31, 2023 compared to December 31, 2022 Years ended December 31, Favorable (dollars in thousands) 2023 2022 (Unfavorable) Total revenues $ 387,508 $ 117,753 $ 269,755 Costs and expenses Cost of revenues Cost of revenues - energy, hosting and other (223,338) (72,715) (150,623) Cost of revenues - depreciation and amortization (179,513) (78,709) (100,804) Total cost of revenues (402,851) (151,424) (251,427) Operating expenses General and administrative expenses (95,230) (56,739) (38,491) Gains (losses) on digital assets and digital assets loan receivable 331,484 (14,460) 345,944 Legal reserves — (26,131) 26,131 Impairment of deposits due to vendor bankruptcy filing — (24,661) 24,661 Impairment of digital assets — (182,891) 182,891 Impairment of patents — (919) 919 Impairment of mining equipment and advances to vendors — (332,933) 332,933 Gain on sale of equipment, net of disposals — 83,879 (83,879) Gains (losses) on digital assets held within investment fund — (85,017) 85,017 Total operating expenses 236,254 (639,872) 876,126 Operating income (loss) 220,911 (673,543) 894,454 Net gain from extinguishment of debt 82,267 — 82,267 Loss on hedge instruments (17,421) — (17,421) Equity in net earnings of unconsolidated affiliate (617) — (617) Impairment of loan and investment due to vendor bankruptcy filing — (31,013) 31,013 Interest expense (10,350) (14,981) 4,631 Other non-operating income 2,809 1,283 1,526 Income (loss) before income taxes 277,599 (718,254) 995,853 Income tax benefit (expense) (16,426) 24,232 (40,658) Net income (loss) $ 261,173 $ (694,022) $ 955,195 Supplemental information: bitcoin (“BTC”) production during the period, in whole BTC (1) 12,852 4,144 8,708 Average bitcoin per day, in whole BTC 35.2 11.4 23.8 Total margin (total revenues less total cost of revenues) $ (15,343) $ (33,671) $ 18,328 Total margin excluding the impact of depreciation and amortization $ 164,170 $ 45,038 $ 119,132 General and administrative expenses excluding stock-based compensation $ (62,586) $ (32,144) $ (30,442) Total impairments due to vendor bankruptcy filing $ — $ (55,674) $ 55,674 Installed Hash Rate (Exahashes per second) - at end of period (2) 25.2 7.0 18.2 Energized Hash Rate (Exahashes per second) - at end of period (2) 24.7 7.0 17.7 Average operational Hash Rate (Exahashes per second) (3) 19.4 N/A N/A Share of available miner rewards 3.6 % 1.2 % 2.4 % Number of blocks won 1,725 621 1,104 Transaction fees as a percentage of total 7.7 % 1.3 % 6.4 % 43 Table of Contents Reconciliation to Adjusted EBITDA: Net income (loss) $ 261,173 $ (694,022) $ 955,195 Exclude: Interest expense 10,350 14,981 (4,631) Exclude: Income tax expense (benefit) 16,426 (24,232) 40,658 EBIT 287,949 (703,273) 991,222 Exclude: Depreciation and amortization (4) 181,590 78,709 102,881 EBITDA 469,539 (624,564) 1,094,103 Exclude: Stock compensation expense 32,644 24,595 8,049 Exclude: Net gain from extinguishment of debt (82,267) — (82,267) Exclude: Total impairments due to vendor bankruptcy filing — 55,674 (55,674) Exclude: Impairment of patents — 919 (919) Adjusted EBITDA $ 419,916 $ (543,376) $ 963,292 (1) Includes 112 bitcoin representing the Company’s share of the equity method investee for the year ended December 31, 2023.
Biggest changeThe following table sets forth items derived from our Consolidated Statements of Operations for the years ended December 31, 2024 and 2023: Year Ended December 31, Favorable (dollars in thousands) 2024 2023 (Unfavorable) Revenues Mining $ 624,740 $ 387,508 $ 237,232 Hosting services 31,638 — 31,638 Total revenues 656,378 387,508 268,870 Costs and expenses Cost of revenues Mining (381,642) (223,338) (158,304) Hosting services (30,403) — (30,403) Depreciation and amortization (403,706) (179,513) (224,193) Total cost of revenues (815,751) (402,851) (412,900) Operating expenses General and administrative expenses (272,078) (92,418) (179,660) Change in fair value of digital assets 813,814 331,484 482,330 Change in fair value of derivative instrument (2,043) — (2,043) Research and development (13,229) (2,812) (10,417) Early termination expenses (38,061) — (38,061) Amortization of intangible assets (22,919) — (22,919) Total operating expenses 465,484 236,254 229,230 Operating income 306,111 220,911 85,200 Change in fair value of digital assets - receivable, net 299,796 — 299,796 Gain on investments 4,236 — 4,236 Loss on hedge instruments (580) (17,421) 16,841 Equity in net earnings of unconsolidated affiliate (1,505) (617) (888) Net gain from extinguishment of debt 13,121 82,267 (69,146) Interest income 16,711 2,809 13,902 Interest expense (12,996) (10,350) (2,646) Other non-operating loss (8,391) — (8,391) Income before income taxes 616,503 277,599 338,904 Income tax expense (75,495) (16,426) (59,069) Net income $ 541,008 $ 261,173 $ 279,835 38 Table of Contents Supplemental information: bitcoin (“BTC”) production during the period, in whole BTC (1) 9,430 12,852 (3,422) Average bitcoin per day, in whole BTC 25.8 35.2 (9.4) General and administrative expenses excluding stock-based compensation (in thousands) $ (114,436) $ (59,774) $ (54,662) Energized Hashrate (Exahashes per second) - at end of period (2) 53.2 24.7 28.5 Direct Energy Cost per bitcoin (3) $ 28,801 $ — $ 28,801 Cash Cost per kilowatt per hour (“KWh”) (4) 0.039 — 0.039 Cost per Petahash per day (5) $ 38.6 $ 46.4 $ 7.8 BTC Yield (6) 62.4 % (22.1) % 84.4 % Average cost of BTC mined (7) $ 41,908 $ 17,530 $ 24,377 Average cost of BTC purchased (7) $ 87,205 N/A N/A Share of available miner rewards 4.1 % 3.6 % 0.5 % Number of blocks won 2,132 1,725 407 Transaction fees as a percentage of total 6.2 % 7.7 % (1.5) % Reconciliation to Adjusted EBITDA: Net income $ 541,008 $ 261,173 $ 279,835 Interest expense (income), net (3,715) 7,541 (11,256) Income tax expense 75,495 16,426 59,069 Depreciation and amortization (8) 438,995 181,590 257,405 EBITDA 1,051,783 466,730 585,053 Stock compensation expense 157,642 32,644 124,998 Change in fair value of derivative instrument 2,043 — 2,043 Early termination expenses and other (9) 33,825 — 33,825 Net gain from extinguishment of debt (13,121) (82,267) 69,146 Adjusted EBITDA $ 1,232,172 $ 417,107 $ 815,065 Reconciliation to Total margin excluding depreciation and amortization: Total revenues $ 656,378 $ 387,508 $ 268,870 Total cost of revenues (815,751) (402,851) (412,900) Total margin (159,373) (15,343) (144,030) Less: Cost of revenues - depreciation and amortization 403,706 179,513 224,193 Total margin excluding depreciation and amortization: Mining 243,098 164,170 78,928 Hosting services 1,235 — 1,235 Total margin excluding depreciation and amortization $ 244,333 $ 164,170 $ 80,163 (1) Includes 382 and 112 bitcoin representing our share of the equity method investee, the ADGM entity, for the year ended December 31, 2024 and 2023, respectively.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. Management must make assumptions, judgments and estimates to determine the Company’s income tax benefit or expense and deferred tax assets and liabilities.
The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. Management must make assumptions, judgments and estimates to determine our income tax benefit or expense and deferred tax assets and liabilities.
Throughout the period that the digital asset loan receivable is outstanding, the receivable will be measured at the fair value of the underlying loaned digital asset with changes recorded in operating income (loss) in current period earnings.
Throughout the period that the digital asset receivable is outstanding, the receivable will be measured at fair value of the underlying loaned digital asset with changes recorded in other non-operating income (loss) in current period earnings.
The Company utilizes the probability of default (“PD”) loss given default (“LGD”) approach to estimating the allowance for credit loss (“ACL”) at origination and subsequent reporting periods. In order to apply the PD LGD approach, management considers the lifetime of the digital asset loan receivable, the reasonable and supportable forecast period, and the PD LGD.
We utilize the probability of default (“PD”) loss given default (“LGD”) approach to estimating the allowance for credit loss (“ACL”) at origination and subsequent reporting periods. In order to apply the PD LGD approach, management considers the lifetime of the digital asset receivable, the reasonable and supportable forecast period, and the PD LGD.
The Company recognizes tax positions when they are more likely than not of being sustained. Recognized tax positions are measured at the largest amount of benefit greater than 50% likely of being realized. Each period, the Company evaluates tax positions and adjust related tax assets and liabilities in light of changing facts and circumstances.
We recognize tax positions when they are more likely than not of being sustained. Recognized tax positions are measured at the largest amount of benefit greater than 50% likely of being realized. Each period, we evaluate tax positions and adjust related tax assets and liabilities in light of changing facts and circumstances.
At loan commencement and throughout the loan period, the Company considers and accounts for the credit risk of the borrower using the principles in Topic 326 – Financial Instruments - Credit Losses (“Topic 326”) to measure any credit impairment. The digital asset loan receivable is presented net of any allowance for credit losses.
At loan commencement and throughout the loan period, we consider and account for the credit risk of the borrower using the principles in Topic 326 – Financial Instruments - Credit Losses (“Topic 326”) to measure any credit impairment. The digital asset receivable is presented net of any allowance for credit losses.
However, these metrics cannot be tied directly to any production level expected to be actually achieved as (a) there may be delays in the energization of Installed Hash Rate (b) the Company cannot predict when installed and energized mining rigs may be offline for any reason, including curtailment or machine failure and (c) the Company cannot predict Global Hash Rate (and therefore the Company's share of the Global Hash Rate), which has a significant impact on the Company's ability to generate bitcoin in any given period.
However, metrics cannot be tied directly to any production level expected to be actually achieved as (a) there may be delays in the energization of hashrate (b) we cannot predict when operational mining rigs may be offline for any reason, including curtailment or machine failure and (c) we cannot predict Global Hashrate (and therefore our share of the Global Hashrate), which has a significant impact on our ability to generate bitcoin in any given period.
Management uses adjusted EBITDA, total margin excluding depreciation and amortization, and the supplemental information provided herein as a means of understanding, managing, and evaluating business performance and to help inform operating decision making.
We define total margin excluding depreciation and amortization as (a) GAAP total margin less (b) depreciation and amortization. Management uses adjusted EBITDA and total margin excluding depreciation and amortization, along with the supplemental information provided herein, as a means of understanding, managing and evaluating business performance and to help inform operating decision-making.
To stay competitive, the Company remains focused on strategically deploying additional mining rigs and scaling its operations, while managing its fleet as it ages along the obsolescence curve. In addition, Marathon continuously evaluates strategic opportunities to support its growth strategy, and seeks to enhance operational efficiencies by utilizing efficient mining rigs and securing contracts with price protection clauses.
To stay competitive, we remain focused on strategically deploying additional mining rigs and scaling our operations, while managing our fleet as it ages along the obsolescence curve. In addition, we continuously evaluate strategic opportunities to support our growth strategy, and seek to enhance operational efficiencies by utilizing efficient mining rigs and securing contracts with price protection clauses.
The Company accounts for income taxes in accordance with ASC 740 - Income Taxes, using the asset and liability method.
We account for income taxes in accordance with ASC 740 - Income Taxes , using the asset and liability method.
Cash flows from operating activities resulted in a use of funds of $315.7 million, as net income, adjusted for non-cash and non-operating items, in the amount of $96.6 million was more than offset by the use of cash of $412.2 million from changes in operating assets and liabilities.
Cash flows from operating activities resulted in a use of funds of $677.0 million, as net income, adjusted for non-cash and non-operating items, in the amount of $121.6 million was more than offset by the use of cash of $798.6 million from changes in operating assets and liabilities.
TRENDS AND UNCERTAINTIES IMPACTING OUR BUSINESS AND INDUSTRY Bitcoin Value Our revenues are generally comprised of block rewards earned in bitcoin as a result of successfully solving blocks, and transaction fees earned for verifying transactions in support of the blockchain. Currently the reward for each solved block is equal to 6.25 bitcoin plus transaction fees.
TRENDS AND UNCERTAINTIES IMPACTING OUR BUSINESS AND INDUSTRY Bitcoin Value Our revenues are generally comprised of block rewards earned in bitcoin as a result of successfully solving blocks, and transaction fees earned for verifying transactions in support of the blockchain.
The Company uses each instrument’s life of loan period for estimating current expected credit losses, unadjusted by any prepayment risk as any risk would be immaterial to either the repayment in kind or the accrued loan fee receivable. Revenues The Company recognizes revenue in accordance with ASC 606.
We use each instrument’s life of loan period for estimating current expected credit losses, unadjusted by any prepayment risk as any risk would be immaterial to either the repayment in kind or the accrued loan fee receivable.
Changes in cash flows from operating assets and liabilities were driven by a use of funds associated with changes in digital assets of $386.0 million due to the non-cash adjustment for bitcoin mining revenues, deposits of $23.8 million resulting from increased deposits associated with hosting agreements and prepaid expenses of $1.9 million.
Changes in cash flows from operating assets and liabilities were driven by a use of funds associated with changes in digital assets of $624.7 million due to the non-cash adjustment for bitcoin mining revenues and deposits of $189.6 million resulting from increased deposits associated with hosting agreements and a surety bond.
CONTRACTUAL OBLIGATIONS AND COMMITMENTS The Company contracts with service providers for hosting its equipment and operational support in data centers where the Company’s equipment is deployed.
CONTRACTUAL OBLIGATIONS AND COMMITMENTS We contract with service providers for hosting our equipment and operational support in data centers where our equipment is deployed.
On September 7, 2023, the Company entered into agreements with certain holders of the Notes to exchange an aggregate $416.8 million principal amount of Notes for 31,722,417 shares of the Company's common stock and recorded a gain on extinguishment of debt in the amount of $82.6 million.
In the prior year period, we entered into agreements with certain holders of December 2026 Notes to exchange an aggregate $416.8 million principal amount of December 2026 Notes for 31,722,417 shares of our common stock and recorded a gain in the amount of $82.6 million.
Financial Condition and Liquidity The following table presents a summary of the Company’s cash flow activity for the year ended December 31, 2023 and 2022: For the year ended December 31, (in thousands) 2023 2022 Net cash used in operating activities $ (315,651) $ (176,478) Net cash provided by (used in) investing activities 4,595 (390,228) Net cash provided by financing activities 555,864 410,655 Net increase (decrease) in cash, cash equivalents and restricted cash 244,808 (156,051) Cash, cash equivalents and restricted cash — beginning of period 112,505 268,556 Cash, cash equivalents and restricted cash — end of period $ 357,313 $ 112,505 Cash flows for the year ended December 31, 2023: Cash and cash equivalents totaled $357.3 million at December 31, 2023, an increase of $244.8 million from December 31, 2022.
FINANCIAL CONDITION AND LIQUIDITY The following table presents a summary of our cash flow activity for the years ended December 31, 2024 and 2023: For the Year Ended December 31, (in thousands) 2024 2023 Net cash used in operating activities $ (677,022) $ (315,651) Net cash (used in) provided by investing activities (3,229,059) 4,595 Net cash provided by financing activities 3,952,539 555,864 Net increase in cash, cash equivalents and restricted cash 46,458 244,808 Cash, cash equivalents and restricted cash — beginning of period 357,313 112,505 Cash, cash equivalents and restricted cash — end of period $ 403,771 $ 357,313 Cash flows for the year ended December 31, 2024: Cash, cash equivalents and restricted cash totaled $403.8 million at December 31, 2024, an increase of $46.5 million from December 31, 2023.
The risks to the Company’s liquidity outlook would include events that materially diminish its access to capital markets and/or the value of its bitcoin holdings and production capabilities, including: • Failure to effectively execute the Company’s growth strategies; • Challenges in the bitcoin mining space and/or additional contagion events (such as the FTX collapse and subsequent bankruptcies of bitcoin mining companies in 2022 and 2023) which could damage the credibility of, and therefore investor confidence in, companies engaged in the digital assets space including Marathon; • Declines in bitcoin prices and/or production, which would impact both the value of the Company’s bitcoin holdings and its ongoing profitability; • Significant increases in electricity costs if these cost increases were not accompanied by increases in the price of bitcoin, as this would also reduce profitability; and • Deteriorating macroeconomic conditions, including the impacts of inflation and increased interest rates, as well as instability in the banking system.
The risks to our liquidity outlook would include events that materially diminish our access to capital markets and/or the value of our bitcoin holdings and production capabilities, including: • Failure to effectively execute our growth strategies; • Declines in bitcoin prices and/or production, as well as impacts from bitcoin halving events, which would impact both the value of our bitcoin holdings and our ongoing profitability; 44 Table of Contents • Significant increases in electricity costs if these cost increases were not accompanied by increases in the price of bitcoin, as this would also reduce profitability; and • Deteriorating macroeconomic conditions, including the impacts of inflation and increased interest rates, as well as instability in the banking system.
If the Company concludes derecognition is appropriate, the Company derecognizes the loaned digital assets that it no longer controls and recognizes a right to receive back in the future such loaned digital assets. The digital asset loan receivable is recorded at the fair value of the underlying digital assets.
If we conclude derecognition is appropriate, we derecognize the loaned digital assets that we no longer control and recognizes a right to receive back in the future such loaned digital assets. In accordance with ASU 2023-08, digital asset receivable is recorded at the fair value of the underlying digital assets.
Digital assets loan receivable When the Company loans digital assets to a third-party entity, the Company first evaluates whether to derecognize such digital assets based on an evaluation of relevant control and asset derecognition considerations that include whether: • The Company has transferred present rights to the economic benefits associated with the digital asset for a different right to receive digital assets in the future; • The Company cannot sell, pledge, loan, or otherwise use the lent digital assets while the loan is outstanding, as those rights have been transferred to the borrower; 54 Table of Contents • Inherent in the realization of the economic benefits associated with the digital asset loan receivable is exposure to credit risk of the third-party entity; and • The third-party entity that holds the digital assets can deploy those assets at its discretion for the duration of the lending arrangement and bears the risk of loss or theft of those assets, and otherwise has the ability to direct the use of the assets transferred.
CRITICAL ACCOUNTING ESTIMATES The following accounting estimates relate to the significant areas involving management’s judgments and estimates in the preparation of our financial statements, and are those that it believes are the most critical to aid the understanding and evaluation of this management discussion and analysis: • Digital assets - receivable, net • Long-lived assets • Income taxes • Assets acquired and liabilities assumed in a business combination • Goodwill impairment • Loss contingencies 45 Table of Contents Digital assets - receivable, net When we loan digital assets to a third-party entity, we first evaluate whether to derecognize such digital assets based on an evaluation of relevant control and asset derecognition considerations that include whether: • We have transferred present rights to the economic benefits associated with the digital asset for a different right to receive digital assets in the future; • We cannot sell, pledge, loan, or otherwise use the lent digital assets while the loan is outstanding, as those rights have been transferred to the borrower; • Inherent in the realization of the economic benefits associated with the digital asset receivable is exposure to credit risk of the third-party entity; and • The third-party entity that holds the digital assets can deploy those assets at its discretion for the duration of the lending arrangement and bears the risk of loss or theft of those assets, and otherwise has the ability to direct the use of the assets transferred.
When the Company produces and holds bitcoin on its Consolidated Balance Sheets, it excludes such produced and held bitcoin from its operating cash flows. As the Company monetizes bitcoin in the future, those proceeds are reported as cash flows from investing activities.
When we produce and hold bitcoin on our Consolidated Balance Sheets, we exclude such produced and held bitcoin from our operating cash flows. If we monetize bitcoin in the future, those proceeds are reported as cash flows from investing activities.
Income tax benefit (expense) : The Company recorded income tax expense of $16.4 million for the year ended December 31, 2023 compared to an income tax benefit of $24.2 million in the prior year period.
There were no such activities in the prior year period. Income tax benefit (expense) : We recorded income tax expense of $75.5 million for the year ended December 31, 2024 compared to an income tax expense of $16.4 million in the prior year period.
This $30.4 million or approximately 94.7% increase in expenses was primarily due to the increased scale of the business and headcount, including payroll and benefits, professional fees, and other third-party costs associated with growth.
The $54.7 million or approximately 91% increase in expenses was primarily due to the increased scale of the business and our strategic shift to an asset-heavy strategy, including payroll and benefits, professional fees, facility and equipment repair and maintenance expenses, and other third-party costs associated with growth in the business.
There were no outstanding hedging transactions as of the year ended December 31, 2023 and there were no such activities in the prior year period.
There were various outstanding bitcoin hedging transactions as of the year ended December 31, 2024 and 2023.
Under these arrangements, the Company expects to pay at a minimum approximately (i) $920.8 million in total payments during the calendar years 2024 through 2026, and (ii) $139.0 million in total payments during the calendar years 2027 through 2028.
Under these arrangements, we expect to pay at a minimum approximately (i) $471.3 million in total payments during the calendar years 2025 through 2027, and (ii) $9.9 million in total payments during the calendar years 2028 through 2029.
Assuming the Notes due 2026 are not converted into common stock, repurchased or redeemed prior to maturity, (i) annual interest payments of approximately $3.3 million in each calendar year from 2024 through 2026, and (ii) principal in the amount of $330.7 million upon the maturity in November 2026, will be payable under the Notes due 2026.
Assuming the remaining outstanding 1.0% Convertible Senior Notes due 2026 (the “December 2026 Notes”) and the 2024 Convertible Notes (collectively, the “Convertible Notes”) are not converted into common stock, repurchased or redeemed prior to maturity, (i) annual interest payments of approximately $0.7 million in each calendar year from 2025 through 2026 in connection with the December 2026 Notes and annual interest payments of approximately $6.4 million in each calendar year from 2025 through 2031 in connection with the 2.125% Convertible Senior Notes due 2031 and (ii) principal for each of the Convertible Notes upon maturity, for a total of $2.3 billion, will be payable under the terms of the Convertible Notes.
The Company defines adjusted EBITDA as (a) GAAP net income (loss) plus (b) adjustments to add back the impacts of (1) depreciation and amortization, (2) interest expense, (3) income tax expense (benefit) and (4) adjustments for non-cash and non-recurring items which currently include (i) stock compensation expense, (ii) impairments of patents and (iii) gains and losses on extinguishment of debt.
We define adjusted EBITDA as (a) GAAP net income plus (b) adjustments to add back the impacts of (1) interest, (2) income taxes, (3) depreciation and amortization and (4) adjustments for non-cash and/or non-recurring items which currently include (i) stock compensation expense, (ii) change in fair value of derivative instrument, (iii) early termination expenses and other, (iv) net gain from extinguishment of debt.
Equity in net earnings of unconsolidated affiliate: During the year ended December 31, 2023, the Company recorded its share of net losses for its 20% interest in the ADGM Entity in the amount of $0.6 million, which began mining operations during the third quarter of 2023.
Equity in net earnings of unconsolidated affiliate: During the year ended December 31, 2024, we recorded our share of net losses for our 20% interest in the ADGM Entity in the amount of $1.5 million, compared to $0.6 million in the prior year period.
The Company’s share of the ADGM Entity’s operating results included earnings from the production of 112 bitcoin and approximately $2.1 million of depreciation and amortization during the year ended December 31, 2023. Interest expense : Interest expense was $10.4 million for the year ended December 31, 2023 compared to $15.0 million in the prior year.
Our share of the ADGM Entity’s operating results included earnings from the production of 382 bitcoin, a $4.1 million impairment of property and equipment and approximately $12.4 million of depreciation and amortization during the year ended December 31, 2024, whereas in the prior year period, our share of ADGM Entity’s operating results included earnings from production of 112 bitcoin and approximately $2.1 million of depreciation and amortization.
Adjusted EBITDA : Adjusted EBITDA was a loss of $543.4 million for the year ended December 31, 2022 compared to a positive adjusted EBITDA of $172.4 million in the prior year period.
Adjusted EBITDA : Adjusted EBITDA was $1.2 billion for the year ended December 31, 2024 compared to adjusted EBITDA of $417.1 million in the prior year period.
Cash flows from financing activities resulted in a source of cash of $555.9 million, primarily from the periodic issuance of common stock under the Company’s 2022 ATM of $608.4 million, partially offset by the repayment of the Company’s term loan facility of $50.0 million.
Cash flows from financing activities resulted in a source of cash of $4.0 billion, primarily from the periodic issuance of common stock under our 2024 ATM of $1.9 billion, the issuance of the 2024 Convertible Notes of $2.2 billion, net of issuance costs, partially offset by the repayment of $247.3 million of the December 2026 Notes.
Cost of revenues – depreciation and amortization during the year ended December 31, 2023 totaled $179.5 million compared to $78.7 million in the prior year period.
As of December 31, 2024, we exited a majority of our hosting facilities to strategically focus on our owned mining business. Cost of revenues – depreciation and amortization during the year ended December 31, 2024 totaled $403.7 million compared to $179.5 million in the prior year period.
The depreciation charge is calculated on a straight-line basis and depends on the estimated useful lives of each type of asset and, in certain circumstances, estimates of fair values and residual values. The Company’s property and equipment is primarily composed of bitcoin mining rigs, which are largely homogeneous and have approximately the same useful lives.
Long-Lived Assets We have long-lived assets that consist primarily of property and equipment stated at cost, net of accumulated depreciation and impairment, as applicable. The depreciation charge is calculated on a straight-line basis and depends on the estimated useful lives of each type of asset and, in certain circumstances, estimates of fair values and residual values.
The Company held approximately 15,126 bitcoin on its Consolidated Balance Sheets with a carrying value of $639.7 million as of December 31, 2023, which value may be materially impacted as the market value of bitcoin fluctuates.
We held approximately 44,893 bitcoin, including loaned and collateralized bitcoin, on our Consolidated Balance Sheets with a carrying value of approximately $4.2 billion as of December 31, 2024, which value may be materially impacted as the market value of bitcoin fluctuates.
Management reviews the Company’s long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (asset group) may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of their carrying amount to the undiscounted future cash flows expected to be generated thereby.
Recoverability of assets to be held and used is measured by a comparison of their carrying amount to the undiscounted future cash flows expected to be generated thereby.
Accordingly, the Company utilizes the group method of depreciation for its bitcoin mining rigs. The Company updates the estimated useful lives of its asset group of bitcoin mining rigs periodically as information on the operations of the mining rigs indicates changes are required.
We update the estimated useful lives of our asset group of digital asset mining rigs periodically as information on the operations of the mining rigs indicate changes are required.
General and administrative expenses excluding stock-based compensation was $62.6 million in the current year period compared with $32.1 million in the prior year period primarily due to the increasing scale of our operations.
General and administrative expenses excluding stock-based compensation was $114.4 million in the current year period compared to $59.8 million in the prior year period.
Income taxes The primary objectives of accounting for income taxes are to recognize the amount of income taxes payable or refundable for the current year, and to recognize deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the Company’s financial statements or tax returns.
If such assets are not recoverable based on that test, impairment is recorded in the amount by which the carrying amount of the assets exceeds their fair value as determined in accordance with Accounting Standard Codification (“ASC”) 820. 46 Table of Contents Income Taxes The primary objectives of accounting for income taxes are to recognize the amount of income taxes payable or refundable for the current year, and to recognize deferred tax liabilities and assets for the future tax consequences of events that have been recognized in our financial statements or tax returns.
In response to an increased demand for 41 Table of Contents bitcoin, the Company anticipates additional mining operators entering the market and existing competitors scaling their operations, which will grow the blockchain’s network hash rate and difficulty associated with solving a block.
Management believes, given our recent investments, coupled with our relative position and liquidity, we are well-positioned to execute on our long-term growth strategy. 35 Table of Contents Mining Rig Capacity, Efficiency, and Hashrate In response to an increased demand for bitcoin, we anticipate additional mining operators entering the market and existing competitors scaling their operations, which will grow the blockchain’s network hashrate and difficulty associated with solving a block.
The Company expects to have sufficient liquidity, including cash on hand, cash received from sales of its bitcoin holdings, and access to public capital markets to support ongoing operations. The Company will continue to seek to fund its business activities, and especially its growth opportunities, through the public capital markets, primarily through periodic equity issuances using its at-the-market facilities.
We will continue to seek to fund our business activities, and especially our growth opportunities, through the public capital markets, primarily through periodic equity issuances using our at-the-market facilities.
The $4.6 million, or approximately 30.9% decrease was primarily a result of lower interest costs following the exchange of $416.8 million aggregate principal amount of Notes for shares of the Company’s common stock during the year ended December 31, 2023 compared to the prior year period.
The $2.6 million or approximately 26% increase was a result of the exchange of $416.8 million aggregate principal amount of the December 2026 Notes for shares of our common stock in September 2023 and the issuance of the 2024 Convertible Notes during the year ended December 31, 2024.
As a result, the fair market value of the Company’s bitcoin holdings at December 31, 2023 , was app roximately $639.7 million. The Company expects that its future bitcoin holdings will generally increase but will fluctuate from time to time, both in number of bitcoin held and fair value in US dollars, depending upon operating and market conditions.
Our holdings as of December 31, 2024 excluded 51 bitcoin held by our equity method investee, pending dividend to us. We expect that our future bitcoin holdings will generally increase but will fluctuate from time to time, both in number of bitcoin held and fair value in U.S. dollars, depending upon operating and market conditions.
(2) The Company defines Energized Hash Rate as the total hash rate that could be generated if all installed and energized machines were running at 100% of manufacturers specifications. The Company uses this metric only as an indicator of progress in bringing mining rigs online.
(2) We define Energized Hashrate as the total hashrate that could theoretically be generated if all mining rigs that have been operational are currently in operation and running at 100% of manufacturers’ specifications. We use this metric as an indicator of progress in bringing mining rigs online. We believe this metric is a useful indicator of potential bitcoin production.
Further, the impacts of halving on the Company’s results of operations and financial condition may be exacerbated by changes in the market value of bitcoin, which has historically been subject to significant volatility. For example, as of December 31, 2023, the price of a bitcoin was $42,288, compared to $16,458 as of December 31, 2022.
After the halving event of April 2024, the current reward for each solved block is equal to 3.125 bitcoin plus transaction fees. The impacts of halving on our results of operations and financial condition may be exacerbated by changes in the market value of bitcoin, which has historically been subject to significant volatility.
Income tax (expense) benefit : The Company recorded an income tax benefit of $24.2 million for the year ended December 31, 2022, compared to an income tax expense of $25.0 million in the prior year period.
Interest expense : Interest expense was $13.0 million for the year ended December 31, 2024 compared to $10.4 million in the prior year period.
(3) Defined as the daily Average Operational Hash Rate online during the period. Data not available for prior periods. (4) Includes approximately $2.1 million of depreciation and amortization as the Company’s share in the results of its equity method investee reported in Equity in net earnings of unconsolidated affiliate for the year ended December 31, 2023.
(8) Includes approximately $12.4 million and $2.1 million of depreciation and amortization from our share in the results of our equity method investee, the ADGM entity, reported in “Equity in net earnings of unconsolidated affiliate” for the year ended December 31, 2024 and 2023, respectively, on the Consolidated Statements of Operations.
Liquidity and Capital Resources: Cash and cash equivalents totaled $357.3 million and the fair value of bitcoin holdings was $639.7 million at December 31, 2023. The combined value of cash and cash equivalents and bitcoin, as of December 31, 2023, was $997.0 million.
Liquidity and Capital Resources: Cash and cash equivalents, excluding restricted cash, totaled $391.8 million and the fair value of digital asset holdings, including loaned and collateralized bitcoin, was $4.2 billion at December 31, 2024.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis is intended as a review of significant factors affecting the Company’s financial condition and results of operations for the periods indicated. The discussion should be read in conjunction with Marathon’s Consolidated Financial Statements and the notes presented herein.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with our Consolidated Financial Statements and the related notes and other financial information included elsewhere in this Annual Report.
The $1.5 million, or approximately 118.9% increase was primarily due to the higher balance of cash and cash equivalents and an increase in interest rates in the current year period.
Interest income : Interest income was $16.7 million for the year ended December 31, 2024 compared to $2.8 million in the prior year period. The $13.9 million increase was primarily due to the higher average balance of cash and cash equivalents and interest earned on loaned bitcoin in the current year period.
Under certain of these arrangements, the Company is required to pay variable pass-through power and service fees in addition to these estimated minimum amounts.
Under certain of these arrangements, we are required to pay variable pass-through power and service fees in addition to these estimated minimum amounts. We have purchase agreements to purchase miners and other mining equipment for a total purchase price of $962.7 million. As of December 31, 2024, we have made installment payments totaling $823.5 million.
The $269.8 million, or approximately 229.1% increase in revenues was primarily driven by an increase in bitcoin production year-over-year of $244.3 million and a $25.5 million increase from primarily higher bitcoin prices in the current year period, as the average price of bitcoin mined was 6.1% higher than the average price of bitcoin mined in the prior year period.
The average price of bitcoin mined was 120% higher than the average price of bitcoin mined in the prior year period and average daily bitcoin production was 25.8 bitcoin in the current year period compared with 35.2 in the prior year period.
In connection with the termination of the credit facility, the Company recorded a loss in the amount of $0.3 million to “Net gain from extinguishment of debt” on the Consolidated Statements of Comprehensive Income (Loss) . Loss on hedge instruments: During the year ended December 31, 2023, the Company recorded a $17.4 million realized loss related to bitcoin hedging activities.
Loss on hedge instruments: Loss on hedge instruments during the year ended December 31, 2024, was $0.6 million compared to $17.4 million in the prior year period for losses related to bitcoin hedging activities.
The Company assesses and adjusts the estimated useful lives of its mining rigs when there are indicators that the productivity of the mining assets are higher or lower than the assigned estimated useful lives.
We assess and adjust the estimated useful lives of our mining rigs when there are indicators that the productivity of the mining assets is higher or lower than the assigned estimated useful lives. Management reviews our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (asset group) may not be recoverable.
Revenues : The Company generated revenues of $387.5 million for the year ended December 31, 2023, compared to $117.8 million in the prior year period.
(9) Early termination expenses represent amounts recognized as the cost to early terminate data center hosting agreements in addition to the gain on investments during the period. Revenues : We generated revenues of $656.4 million for the year ended December 31, 2024, compared to $387.5 million in the prior year period.
An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually, or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived asset is impaired.
Goodwill Impairment Goodwill is not subject to amortization, and instead, assessed for impairment annually, or more frequently when events or changes in circumstances indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount in accordance with ASC 350.
The following table summarizes the factors that impacted the increase in total margin for the year ended December 31, 2023 as compared to the prior year period: 44 Table of Contents Revenue: (in thousands) ● Impact of higher amount of bitcoin produced $ 244,258 ● Impact of higher average price of bitcoin produced and other revenue 25,497 Cost of revenue – energy, hosting and other: ● Prior year impact of accelerated costs related to the closure of Hardin facility 18,218 ● Impact of higher costs due to growth in hash rate and improvements to uptime (168,841) Cost of revenue – depreciation and amortization: ● Prior year impact of accelerated costs related to the closure of Hardin facility 36,032 ● Increased due to deployment of mining rigs (136,836) $ 18,328 General and administrative expenses : General and administrative expenses were $95.2 million for the year ended December 31, 2023, compared to expenses of $56.7 million in the prior year period, an increase of $38.5 million or approximately 67.8%.
Revenue: (in thousands) ● Higher average price of bitcoin produced and other revenue $ 348,512 ● Lower amount of bitcoin produced (111,280) ● Third-party hosting 31,638 Cost of revenue – energy, hosting and other: ● Higher costs due to growth in hashrate (232,559) ● Decrease in hash costs and other costs 74,255 ● Third-party hosting (30,403) Total margin excluding depreciation and amortization $ 80,163 General and administrative expenses : General and administrative expenses were $272.1 million for the year ended December 31, 2024, compared to $92.4 million in the prior year period, an increase of $179.7 million or approximately 194%.
On March 8, 2023, the Company terminated both its term loan and its RLOC facilities with Silvergate Bank. 51 Table of Contents Cash flows for the year ended December 31, 2022: Cash, cash equivalents and restricted cash totaled $112.5 million at December 31, 2022, a decrease of $156.1 million from December 31, 2021.
Cash flows for the year ended December 31, 2023: Cash and cash equivalents totaled $357.3 million at December 31, 2023, an increase of $244.8 million from December 31, 2022.
The $150.6 million, or approximately 207.1% increase was primarily driven by the growth in the Company’s hash rate as a result of the deployment and energization of mining rigs in existing and new hosting facilities, which increased hosting and energy costs, as well as improvements in uptime of our mining rigs compared to the significant delays in the energization of our mining rigs the Company experienced in the prior year period.
Cost of revenues – mining during the year ended December 31, 2024 totaled $381.6 million compared to $223.3 million in the prior year period. The $158.3 million or approximately 71% increase was primarily driven by the growth in our hashrate from the deployment and energization of mining rigs compared to the prior year period.
As of December 31, 2023, the Company had sold 19,591,561 shares under this program for an aggregate purchase price of $248.1 million, net of commissions and expenses. Subsequent to December 31, 2023, we sold additional shares of common stock under the 2023 ATM such that the aggregate offering price of shares sold under the 2023 ATM is approximately $750.0 million.
At-the-Market Offering Programs and Proceeds: As of December 31, 2024, we sold 93,411,158 shares of common stock for an aggregate purchase price of $1.9 billion, net of commission and offering expenses of $47.5 million, pursuant to our at-the-market offerings.
Bitcoin holdings as of December 31, 2023: At December 31, 2023, the Company held approximately 15,126 bitcoin on its Consolidated Balance Sheets with a carrying value of $639.7 million .
Bitcoin holdings as of December 31, 2024: At December 31, 2024, we held a total of 44,893 bitcoin, including loaned and collateralized bitcoin, on our Consolidated Balance Sheets with a total fair value of $4.2 billion.
During 2023, the Company mined 12,852 bitcoin, an increase of 8,708 bitcoin, or 210.1%, over the prior year, and as of December 31, 2023, it operated approximately 210,000 mining rigs globally, with installed and energized hash rate of approximately 25.2 and 24.7 exahashes per second, respectively.
As the overall hashrate and difficulty of the Bitcoin network increases, we will need to continue growing our hashrate and remain competitive. During 2024, we mined 9,430 bitcoin, a decrease of 3,422 bitcoin, or 27%, over the prior year period. As of December 31, 2024, we operated approximately 400,000 mining rigs globally, with energized hashrate approximately 53.2 exahashes per second.
The price of a bitcoin increased from $16,458 per bitcoin as of December 31, 2022 to $42,288 per bitcoin as of December 31, 2023, and increase of 157.0% benefiting the value of the Company’s bitcoin holdings as of December 31, 2023, compared to the prior year period.
For example, as of December 31, 2024, the price of a bitcoin was $93,354, compared to $42,288 as of December 31, 2023.
Net income (loss) : The Company recorded net income of $261.2 million for the year ended December 31, 2023 compared to a net loss of $694.0 million in the prior year period.
The $75.5 million income tax expense primarily arises from the release of the valuation allowance on deferred tax assets, driven by the increase in bitcoin’s fair value and positive forecasts for its future value. 42 Table of Contents Net income : We recorded net income of $541.0 million for the year ended December 31, 2024 compared to net income of $261.2 million in the prior year period.
Removed
In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties.
Added
Some of the information contained in this MD&A or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. Please review Part I, Item 1A.
Removed
The Company’s actual results could differ significantly from those expressed, implied, or anticipated in these forward-looking statements as a result of certain factors discussed herein and any other periodic reports filed and to be filed with the SEC.
Added
“Risk Factors” of this Annual Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following MD&A.
Removed
BUSINESS OVERVIEW Marathon Digital Holdings, Inc. is one of the world’s largest publicly traded bitcoin mining companies with operations in North America, the Middle East, and Latin America. The Company’s core business is utility-scale Bitcoin mining, which produces or “mines” bitcoin using one of the industry’s largest and most energy-efficient fleets of specialized computers.
Added
BUSINESS OVERVIEW MARA is a vertically integrated energy and digital infrastructure company that leverages high-intensity compute, such as bitcoin mining, to monetize underutilized energy assets and optimize power management.
Removed
The Company is also committed to carbon neutrality and growing operations through predominately renewable energy sources. As of December 31, 2023, the Company had approximately 210,000 energized and operational mining rigs, capable of producing 24.7 exahashes per second with an efficiency of 25 joules per terahash.
Added
As of December 31, 2024, our total energy portfolio consisted of approximately 1.7 gigawatts (“GW”) of capacity with 16 data centers deployed across North America, the Middle East, Europe, and Latin America. We believe we are the world’s largest publicly traded bitcoin mining company, with the majority of our production in the United States.
Removed
The Company believes it has one of the most efficient bitcoin mining fleets in the industry. As of December 31, 2023, sustainable energy sources accounted for 55% of the fleet’s power usage. Historically, the Company has grown quickly to become one of the world’s largest publicly traded bitcoin mining companies.
Added
Historically, we were focused on establishing MARA as the largest and most efficient bitcoin miner. As of December 31, 2024, we operated approximately 400,000 bitcoin mining ASICs, capable of producing 53.2 EH/s with an efficiency of 19.2 joules per terahash, which is among the most efficient in the industry.
Removed
The Company achieved this milestone through an asset-light strategy, which involved deploying its bitcoin miners at third-party hosted sites. This approach saved the Company significant amounts of capital that would have otherwise been invested in data center infrastructure and allowed it to allocate more capital into revenue-generating assets, like Bitcoin miners.
Added
In 2024, we began our strategic transformation into a vertically integrated energy and digital infrastructure company to provide services and products, such as load management and immersion cooling systems, to data center operators and the energy sector.
Removed
The Company has shifted its strategy from an asset-light business model to a diversified and resilient portfolio approach to bitcoin mining operations. This approach involves managing a strategic mix of third-party hosted sites and self-owned and operated sites, which the Company believes can help the business weather market downturns by optimizing its cost structure.
Added
To support this transformation, we secured 300% more energy capacity, expanding our total energy portfolio from approximately 0.5 GW to approximately 1.7 GW, while increasing our owned data center portfolio capacity from nearly zero at the beginning of 2024 to approximately 70% to date.
Removed
In January 2024, the Company acquired two data centers totaling 390 megawatts. Following this acquisition, the Company’s operations are moving towards being more evenly split between third-party hosted and self-owned and operated sites.
Added
As part of this initiative, we secured approximately 1.2 GW of nameplate capacity across the United States. In 2024, we adopted a full HODL strategy, retaining all bitcoin mined in our operations or opportunistically purchased in the open market using available cash and proceeds from private offerings of an aggregate principal amount of $2.2 billion of 2024 Convertible Notes.
Removed
In 2023, the Company launched a joint venture in Abu Dhabi, United Arab Emirates, that operates two sites with a total capacity of 250 megawatts, of which the Company owns 20%. The Company believes that these sites operate in one of the world’s most challenging environments, with summertime temperatures of approximately 115 degrees Fahrenheit and 98% humidity.

… 267 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+1 added−1 removed1 unchanged
Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The following discu ssion about our mar ket risk exposures involves forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements. 59 Table of Contents Market Price Risk of Bitcoin.
Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The following discussion about our market risk exposures involves forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements. Market Price Risk of Bitcoin.
We hold a significant amount of bitcoin, as such, we are exposed to the impact of market price changes in bitcoin on its bitcoin holdings.
We hold a significant amount of bitcoin, and as such, we are exposed to the impact of market price changes in bitcoin on our bitcoin holdings.
Removed
At December 31, 2023, we held approximately 15,126 bitcoin and the fair value of a single bitcoin was approximately $42,288, meaning that the fair value of our bitcoin holdings on that date was approximately $639.7 million. 60 Table of Contents
Added
As of December 31, 2024, we held approximately 44,893 bitcoin, of which, 10,374 were loaned or collateralized, for a total fair value of approximately $4.2 billion. 48 Table of Contents

Other MARA 10-K year-over-year comparisons