In a paradoxical outcome for two leading crypto-mining companies, HIVE Digital Technologies and MARA Holdings have reported increased Bitcoin production for the third quarter compared to the same period last year, yet both saw a decline in mining revenue. This dip in revenue reflects the ongoing influence of weaker Bitcoin prices, which impeded the financial benefits of heightened production.
Increased Output, Weak Financial Performance
According to regulatory filings, HIVE managed to boost its Bitcoin output by 49%, reaching 1,070 BTC over the quarter. However, this production increase was overshadowed by a 7.4% drop in mining revenue, which fell to $76 million. Similarly, MARA recorded a 5% rise in Bitcoin output to 2,247 BTC, but their mining revenue plummeted by 34%, dropping to $159 million.
Higher operational costs have also weighed on both companies, with HIVE’s electricity expenditure climbing by 20% to $45.6 million. Meanwhile, MARA experienced a 12% increase in energy costs, reaching $48.1 million, as it expanded its mining capabilities. These financial strains further exacerbated their revenue challenges, prompting HIVE to record a $31.2 million non-cash impairment charge on its equipment due to the unfavourable mining economics. In contrast, MARA accounted for a $12 million write-off related to mining equipment as part of its restructuring efforts.
HIVE revealed it is adopting a strategy that combines cash flow from mining with stable income from AI infrastructure.
Continued Investment in AI and Computing Technologies
While Core Scientific plans to exit mining activities by year’s end, firms like HIVE and MARA are diversifying by investing in artificial intelligence and high-performance computing. HIVE experienced a notable 71% rise in its HPC hosting revenue, reaching $8.8 million, now making up 10.4% of their total revenue. This underscores their commitment to expanding beyond traditional mining.
HIVE has outlined an ambitious plan to spend up to $493 million over the next three years to expand its HPC operations. Part of this initiative includes purchasing land, establishing data center infrastructure, and securing GPUs. The company disclosed it had already allocated $145.3 million for this expansion, with approximately $35 million earmarked for converting its Toronto facility into a Tier III data center. Additionally, HIVE is targeting a 100-megawatt substation expansion at its Yguazú site in Paraguay by 2026.
MARA is also advancing its AI infrastructure through collaborations with Exaion’s subsidiary and Starwood Digital Ventures. The company plans to manage facilities capable of transitioning between various workloads based on economic conditions, demand, and network status. Nonetheless, they affirmed that Bitcoin mining would remain integral to their platform.
MARA stated its intention to maintain a Bitcoin mining foundation while developing facilities that can transition between different workloads depending on economic conditions, demand, and network status.
Disparity in Earnings and Stock Performance
On the stock market, HIVE shares ended Monday’s regular session with a 1.7% increase, closing at $1.81 before retreating 1.7% to $1.78 in after-hours trading. The company reported a second-quarter revenue of $84.9 million, narrowly falling 2.7% year-on-year but exceeding market expectations of $79.4 million. This mixed performance did little to sway investors significantly.
Conversely, MARA saw remarkable gains in net income attributable to common stockholders, soaring from $123.1 million to $634.4 million, driven by fair value gains on digital assets and receivables. However, their quarterly revenue fell by 35% to $164.2 million compared to the previous year. MARA’s diluted earnings per share rose from $0.27 to $1.28. Following these financial disclosures, MARA’s shares closed up by 4.6% and maintained steady trading around $6.64 after hours.
