Bitcoin miner MARA Holdings (MARA.US) released its third-quarter report, painting a rare split picture: paper profits surged while operating revenue kept shrinking — the company sits at a critical turn from "digging Bitcoin" toward "AI infrastructure."
Revenue and profit present a scissors gap
The report shows third-quarter revenue of $164.2 million, down 35% from $252.4 million a year earlier, and about 7% below the market estimate of $176.1 million. The main cause of the revenue decline was a 37% year-on-year plunge in the average price of the Bitcoin mined, a single factor that wiped out about $94.8 million in revenue; average daily mining output edged up from 23.3 coins to 24.4 coins, only partly offsetting the price headwind. Revenue has now fallen for four straight quarters, hitting its lowest level in nearly nine quarters.
In sharp contrast to revenue, the profit side: quarterly net income of $632.1 million (diluted earnings per share of $1.28), far above the market expectation of a loss of $0.10 per share, and up sharply from $123.1 million a year earlier. But the composition of that profit deserves caution — it includes $885.3 million in unrealized fair-value gains on Bitcoin holdings (versus $343.1 million a year earlier), a classic "paper gain"; excluding that item, the company's operations actually remain in a loss. Adjusted EBITDA was $857.7 million, compared with $395.6 million a year earlier.
The core mining business: efficiency improving, revenue shrinking. On operations, the company's energized hashrate rose 18% year on year to 71.2 EH/s, it won 644 blocks in the quarter (up 2% year on year), its power cost fell to as low as $0.04 per kilowatt-hour, and its cost per PH per day improved 2% to $30.8 — mining efficiency kept rising, yet could not withstand the revenue squeeze from falling coin prices. In the third quarter the company mined 2,247 Bitcoin while selling 3,891 at an average price of $75,300; as of September 30, it held 34,012 Bitcoin and $946.5 million in cash.
Selling coins to repay debt and travel light
A shareholder letter disclosed that after September 30 the company sold 13,597 Bitcoin, raising about $1.1 billion, of which $750 million was used to fully repay a Bitcoin-collateralized term loan; all 17,477 previously pledged Bitcoin were released from pledge, and less than 5% of current holdings are now lent out or pledged. This marks another large-scale draw on its "digital treasury," following the sale of 15,133 Bitcoin (about $1.1 billion) in March this year to buy back convertible bonds. Meanwhile, the board approved a share buyback authorization of up to $500 million. The company made clear it will keep raising cash by selling Bitcoin, to fund AI infrastructure investment, meet convertible bond put obligations exercisable next year, and potential buybacks.
AI pivot: one signed contract and two leases still to be signed. In the third quarter, the company's majority-owned subsidiary Exaion signed a four-year, $79 million GPU computing power service contract with its first U.S. customer, on 100% "take-or-pay" terms; Exaion's total business pipeline is worth more than $3 billion, of which about $1 billion is slated for delivery by the end of 2027 — but the company conceded that this pipeline is not yet contracted and is non-binding. A signal drawing even more market attention: the company acknowledged that talks with potential data center tenants have entered an advanced stage, but the timetable of "signing two leases before year-end" could slip into 2027 — management rarely moving on its own to lower market expectations. In addition, the acquisition of the Long Ridge natural gas power plant has won FERC approval and is expected to close before year-end, with authorized output rising from 485 megawatts to full nameplate capacity of 505 megawatts in the first half of 2027.
The essence of this MARA report is a Bitcoin miner accelerating its "self-remodeling" during a down cycle in coin prices: on one hand selling Bitcoin for cash and repaying collateralized debt, on the other betting on power assets and AI computing power leasing. The surge in paper profit comes from fair-value gains on holdings under accounting rules and does not represent an improvement in operating cash flow; what truly determines whether the transformation narrative holds is whether those two data center leases land before year-end — if they fall through, what the market awaits is not merely a delayed timetable, but a repricing of the transformation story itself.
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