Q1 2025 MARA Holdings Inc Earnings Call
Good afternoon, and welcome Tomorrow is first quarter of 2025 earnings call.
Speaker Change: Thank you for joining us today with me on today's call are our chairman and Chief Executive Officer, Frank <unk>, and our Chief Financial Officer Salmaan Com.
Speaker Change: Today's call includes forward looking statements, including those about our growth plans liquidity and financial performance. These involve risks and uncertainties and actual results may differ materially we disclaim any obligation to update these statements except as required by law for more details see the risk factors section of our latest 10-K and other SEC filings.
Speaker Change: Thanks.
Speaker Change: to the most comparable GAAP measures . We hope you've had the chance to read our shareholder letter and look forward to your feedback.
Speaker Change: We'll begin with some prepared remarks from Fred and Salman. After their comments, we are going to be conducting an analyst interview with Management. Today's session will be conducted by Steven Glagola, an analyst at Jones Trading. With that out of the way, I'm going to turn the call over to Fred to kick things off, Fred. Fred.
Thank you. Good afternoon everyone and thanks for joining us.
Speaker Change: Despite a volatile start to the year, with global markets pulling back much of the momentum they gained ahead of President Trump's inauguration, Bitcoin has shown remarkable resilience. At Mara, we believe Bitcoin is increasingly positioned as a macro hedge, much like gold, offering protection in uncertain environments.
Speaker Change: Our stock tends to move with the overall mood of the market, especially when it comes to how investors feel about Bitcoin. In risk-off environments, our stock often trades down with the rest of the sector, even when our fundamentals remain solid. This correlation is largely tied to Bitcoin's price and broad sentiment towards miners.
Speaker Change: We believe the market doesn't fully recognize the strength of our core mining business, one of the largest in the sector. Meanwhile, some bar peers with smaller operations and little to no Bitcoin holdings are being assigned greater value which doesn't reflect the full picture.
Speaker Change: Some of our competitors have publicly announced plans to limit mining risk, or pivot towards hosting an AIGPU operations.
Speaker Change: While others are expanding by staying grid-attached, investing in new machines, making them less capital-efficient. Meanwhile, we're focused on delivering long-term, low-cost energy solutions that outlast market cycles.
Speaker Change: We're doing this by transforming Maura into a vertically integrated digital energy and infrastructure company.
Speaker Change: This model gives us tighter operational control, improves cost effectiveness, and strengthens our resilience against broader economic shifts. To achieve this transformation, we're focused on two key priorities, strategic growth with low cost energy and efficient capital deployment.
and Advancing Research and Development of Digital Energy Technologies.
Speaker Change: In 2021, we predicted a paradigm shift in our industry where power producers and minors would converge to utilize and excess energy, especially during periods of low demand, thereby stabilizing the grid and maximizing profits.
Speaker Change: We've now seen that vision begin to take hold with the power industry acknowledging the benefits of Bitcoin mining as Iflexible loads
Speaker Change: To deliver on this vision, we're in discussions with governments and global energy corporations in the US, Europe , and the Middle East, which could result in substantially lower energy costs and greater capital efficiency.
Speaker Change: Chasing ex-a-hash targets at grid attached prices invites short-term thinking and we're focused on long-term partnerships to achieve and maintain a low-cost energy strategy.
Speaker Change: In 2-1, Mara delivered strong operational metrics. Our purchased energy cost for Bitcoin was $35,728.
Speaker Change: Our daily costs per PETA hash improve 25% year over year and you're at the start of this quarter we completed a construction or are fully owned 200 megawatt data center in Ohio with 100 megawatts now online and over 12,000 S21 pro miners installed.
Speaker Change: In April , we fully energize 25 megawatts of gas to power operations in North Dakota and Texas monetizing excess gas and mitigating methane emissions for the producers.
Speaker Change: And we are now in the process of building out our 114 megawatt wind farm site in Texas, giving us behind the meter low cost power to extend the life of legacy hardware that otherwise would have been retired. We plan to be fully operational at that site in the second half of this year.
Speaker Change: Through owning infrastructure, self-generating power, extending asset longevity, and managing costs, we are driving capital and operational proficiency across our business.
Speaker Change: Regarding our second key priority, Mara is investing in and developing digital energy technologies which can both improve the efficiency of our operations and diversify our revenue streams.
Speaker Change: As many of you are aware, we're a founding investor in Oravine, a US-based basic manufacturer whose chips are more power efficient than current market offerings.
Speaker Change: We have now begun manufacturing custom miners specific to Mars needs and applications providing unique cost and performance advantages.
Speaker Change: Our hardware, two-pick, two-phase immersion cooling, is now being deployed at two customer sites, one domestic and one international with a 30 megawatt pilot underway. And preliminary day-day indicates that two-pick is successful in enabling miners to increase operational hash rates with minimal losses in productivity, potentially reducing cat-backs by up to one-third for typical mining installation.
Speaker Change: Our software, Mara Poole, enables us to capture higher revenues and keep 100% of transaction fees with block rewards outperforming the network average by over 10%.
Speaker Change: Looking ahead, we're positioning Mara solutions to support AI inference workloads, which require modular low latency infrastructure. We're already in advanced talks with several computer OEMs to roll out pilots this year.
Speaker Change: 2025 is an important year for Mora, as we continue our transformation into a vertically integrated digital asset, digital energy and infrastructure company. And we look forward to sharing more news as the year progresses.
Speaker Change: In conclusion, in Q1 we reduce costs, increase profitability, and prove we can design, build, and operate infrastructure powered by cell phone energy.
Speaker Change: Thank you for your support as we continue our transformation. We've come a long way but this is only the beginning. Now let me turn the call over to Salman for some highlights from the quarter, Salman.
Thank you, Fred.
Salman: Two-one was a challenging quarter as the average price of Bitcoin declined meaningfully compared to Q4 and greater network difficulty combined with rising global hash rate impacted our production.
Salman: Despite these reasons, headwinds, all of the past year are energized hash rate increased 95% to 54.3 extra hash per second in Q1 of 2025, from 27.8 extra hash per second in Q1 of 2024.
Salman: Also, we currently hold over 48,000 Bitcoin on our balance sheet. Since our full huddle announcement in July of last year, the price of Bitcoin has increased approximately 52%.
Salman: At Morris Quinturbo's strategy of accumulating Bitcoin through mining and purchases, we expect it to create significant value for our shareholders over time.
Salman: By mining Bitcoin at one of the largest, I'm sorry, by mining Bitcoin at one of the lowest direct energy cost from a coin in the sector, while also opportunistically acquiring Bitcoin, we can capture upside from both operational profitability and Bitcoin price appreciation.
Now, let me provide some financial highlights for the quarter.
Salman: I would first like to point out that since the beginning of 2024, we have transformed Marathon from 0% on an operated capacity to approximately 70%.
Salman: As a result, we made changes to how we present our financial results to give investors a clearer view of our business. The goal with these changes is to make our financials more transparent and better reflect that we are businesses evolving.
Salman: We also reclassified our prior period numbers to be consistent with the new format. These updates didn't affect our reported financial position, results, or cash flows.
Salman: Revenue has increased 30% to 213.9 million from 165.2 million dollars in the first quarter of 2024.
Salman: Average price of Bitcoin was 77% higher this quarter than the prior period and continued.
Salman: and contributed about $90.7 million to our revenues, which was partially offset by a decrease in Bitcoin production due to having an increased network difficulty.
Salman: On the other hand, Bitcoin price as of March 31, 2025 was 12% lower than as of December 31, 2024. This resulted in an unrealized fair market value loss of $510.2 million in Q1 of 2025.
Salman: As a result, we reported a net loss of $533.4 million or
Salman: Negative 1.55 per deluded share in the quarter compared to a net income of $337.2 million or $1.26 per deluded share in the first quarter of last year.
Salman: Importantly, since the end of the quarter, we've seen a substantial recovery in the price of Bitcoin.
Salman: If that strength continues or even holds steady, we expect it to have a meaningful positive impact on our second quarter results.
Salman: Despite recognizing it lost in due one due to a quadrant Bitcoin price of roughly $82,000 per coin, the current approximately over $100,000 per coin price would apply a fair value gain of over $800,000,000 approximately, thus far into two.
Salman: Adjusted EBITDA decreased to a loss of $483.6 million in Q1 2025 from $542.1 million in Q1 of 2024.
Salman: Finally, our purchase energy cost for Bitcoin for own mining sites was $35,728 per coin and
Salman: Oscar for Avenue, Perpeta Hash for Day, excluding depreciation declined 10% sequentially [inaudible]
Salman: Despite the higher difficulty level to mind, you do a higher global hatch rate. Due to our shift from an asset like to a worthily integrated strategy, I believe we are well positioned to reduce our operating costs over time as we further expand our own initiatives.
Salman: As Brett mentioned earlier, we now operate 139 megawatts of standard or underutilized energy generation.
Salman: Since the beginning of 2025, we have completed the acquisition of a 114 MW wind farm and fully energized our 25 MW on-site and edge-compute operations at all and natural gas fields in Texas
Salman: These new cost projects are expected to further reduce our mining costs over time.
Speaker Change: With that, I'll turn it over to Stephen Gagola from Jones Trading to start our management interview, Stephen.
Stephen Gagola: Thank you, Fred, Salman, and Rob for having me here today, I appreciate it.
Speaker Change: Fred, you opened your shareholder letter and prepared remarks apining on Bitcoin price action and how Mara Stock tends to trade more off-market sentiment versus fundamentals.
Speaker Change: and Bitcoin is up around I think 9% near the data, so hash price is down 4%, but Mara is down 15, and so maybe can you just elaborate on where you see the market disconnect between your fundamentals?
Speaker Change: and Share Performance, and why you see Bitcoin price behaving less like a risk asset going forward.
Speaker Change: Sorry, let's take that into two parts. So just relative to the share price performance. It's interesting. It seems that the market values us for our Bitcoin holdings, but gives us no credit for our Bitcoin mining operations. And if you were to look at how some of our peers who don't have a model or valued, they certainly have.
Speaker Change: A market valuation for the Bitcoin mining operations. So we should in theory get the benefit of both, but then that's just how the market happens to see us. They look at our big model. We're going to be able to get the benefit of the Bitcoin mining operations.
Speaker Change: and they value us that way. We personally think that the company is obviously more valuable than that. As regards to...
The Bitcoin price action, if you would.
Speaker Change: Many people have seen in the news lately. There's now four or five new companies that have announced that they intend to become Bitcoin Treasury companies.
Speaker Change: You've seen that the state of New Hampshire has now approved their Bitcoin Strategic Reserve and they will be actually investing in Bitcoin and buying it. The state of Arizona is going to allocate
Speaker Change: Bitcoin to the Bitcoin strategic reserve that they're creating that is in the possession of state government.
Law Enforcement and others.
Speaker Change: and I fully expect to see other states continue in this path of establishing strategic
Speaker Change: In the very near future here, we'll see the administration of Washington announced how much Bitcoin is going into this strategic reserve because I believe we're coming up on the deadline for that.
Speaker Change: And I think we're starting to see continued good institutional inflows into the ETFs, and we're seeing a number that was published.
Speaker Change: Earlier this week or last week that showed about 90% of existing Bitcoin is not held by corporates and ETFs. And so as that continues to happen, that's going to continue to drive the price of Bitcoin up. And so I believe that we are in a very different
Speaker Change: Market Regime and previous regimes where we had cycles that every four years Bitcoin would act based on having and minor productions.
Speaker Change: But if you look at the market today, even though most miners are selling in Mara's still doing a full hobble strategy, the price of Bitcoin is moving up. So there's clearly demand and excess of supply. And if you think of...
Stock-to-flow ratios, 450 new Bitcoin being emitted today.
Speaker Change: If every minor were selling Bitcoin, that would be 400 Bitcoin being going into the market every day and yet a greater number than that are being purchased every day by just a handful of players. So I think we're going to continue to see things move up in Bitcoin longer term, which is why we are still in a very much a full hollow position.
Speaker Change: Thanks. And I like to focus, I guess, my lead questions here on your off-grid expansion strategy. So first, on the types of off-grid sites, Mars prioritizing for future growth.
Speaker Change: Can you elaborate on the public-private partnerships with governments and energy companies that you're currently in discussions with, and are you focusing more on flare gaps or wind or other sources for new acquisitions and developments?
So
If you think about...
Speaker Change: What I said four years ago, I think it was at the mining disrupt conference in July of 2021. I said that Bitcoin miners are going to have to partner with energy companies or energy companies we're going to own them.
Speaker Change: And that is because I believe that eventually great attached Bitcoin mining where you have a PPA and you're paying an average cost which I believe today the average PPA for a Bitcoin miners somewhere north of 4 cents a kilowatt hour.
Speaker Change: Would not be tenable as you start getting out into the years of 2028 and the having in 2032 and that you would have to partner with energy companies and find a different way to structure
Speaker Change: So without devolging details, we are very much executing on that vision of partnering with energy companies. If you look at the Duke University study that was recently done...
Speaker Change: They published statistics basically saying that while the AI industry needs somewhere in excess of 40 gigawatts of power to deploy their growth plans, the US Energy Grid has an excess of 70 gigawatts available.
Speaker Change: If the load is willing to be flexible by a small percentage, which currently the AI industry is not.
Speaker Change: We believe that by bringing solutions for load balancing to the AI industry that will enable AI data centers to co-locate with Bitcoin miners.
Speaker Change: We're Bitcoin miners provide the flexible load that enables AI data centers to operate.
Speaker Change: as a flexible load on the grid, just to open up.
Speaker Change: Huge amounts of power to the air industry. And as we start shifting to influencer, what is now more being called agentic AI
Speaker Change: Those types of data centers don't need 500, 600, 700 megawatts. They need less than 5, they need less than 50. You should have much smaller data centers located in closer proximity.
Speaker Change: to the customers that are operating them, primarily private cloud operations, near-prem, wrong-prem. So we believe that the future...
of Energy is about partnering with energy companies.
Speaker Change: where we can help them monetize every stranded electron or every underutilized electron. And if you look in markets like the Middle East, for example, when we started working in UAE in the winter time,
Speaker Change: They had upwards of three gigawatts of excess power available and in the summer time that dropped fairly dramatically. But since then, they have continued to add energy generating capacity.
Speaker Change: If you look at Saudi Arabia, they likely have fortified gigawatts of excess energy capacity today that could be made available and monetized in use.
Speaker Change: If you look in Europe , you have a similar situation. While people read and headlines about Spain and Portugal going offline due to grid instability issues, they have built out huge amounts of of renewable energy, which is not really...
Speaker Change: Felling Energy during a great portion of the year. And those are all electrons that are going under utilized.
Speaker Change: And so our focus is to work together with energy companies, work together with sovereigns and government entities to take advantage of all of those underutilized electrons by structuring business relationships that enable us to partner with them on a long term basis.
Speaker Change: to build, operate, and manage essentially flexible loads that can help monetize that stranded energy. As you look at the mix,
Speaker Change: What you're going to find is a mix of thermal, a mix of wind, solar, and some flare gas. It really depends on the market and the partner.
Speaker Change: We're in discussions with some of the largest energy companies in the world that have a mix of all those energy sources and nuclear.
and their concern is one of how to lay balance.
Loathe on the grid
How do they deploy?
Speaker Change: Flexible base load and heavily monetized from behind the meter at renewable sites, the electrons they can't sell today. And so you'll continue to see a broad mix of energy generating assets in regards to flare gas.
There are a lot of gas assets around the world.
that are very applicable to this method.
Speaker Change: and what I think you'll see us doing more and more in the future is as we continue to work with especially oil and gas producers, you'll see chunks of this flare gas.
aggressively in partnership with these public and private entities.
and many more. Thank you. Thank you.
Speaker Change: across the world. And as you may recall, you know, one of our goals, stated goals was to grow our international business such that we had about a 50-50 mix between U.S.
Speaker Change: and International, and we'll continue to do that and we believe that is a great way of delivering on growing.
Speaker Change: U.S. pass rate because even though we operate outside the U.S., it doesn't mean we won't be pointing that pass rate back to U.S. controlled pools. So we're very excited about being able to contribute to U.S.
Speaker Change: Global Mining, Share Growth across all the countries that remind me.
I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry.
Speaker Change: Thanks, Fred. And any guidance on the timeline is when we should expect those partnerships to start coming to fruition. Like, is that over the course of 25 starting? Or is that, you know, I know it's a three-year target that you're looking at, but just any context you could provide there.
Speaker Change: What that does is causes the market to look at us chasing a specific number and delivering out a certain time, and when you're working with these large government in energy majors, things can take longer than one thing. I think what I can say, though, is that you will see good progress this year.
Speaker Change: and some announcements that were given indication of the potential of what's going to happen over the next few years. And I think you'll, you know, you'll see us showing up at events and places where
Other minors, normally, wouldn't be.
as we talk to these partners.
Speaker Change: Thank you. Maybe this one for Salman, they're proud of what they want to take it. You know, Mayor reported a hash cost of $2.85 per tarash in Q1 and that's, I think, Mark's four consecutive quarters of the control improvement. As you continue to expand its off-grade power capacity, how do you expect this to impact your hash cost position over the next three years?
Salman, do you want to take that?
Speaker Change: So, Stephen, as you mentioned, we have sequentially reduced our hash cost and our highs have been
for Capital and Operational Efficiency.
Speaker Change: and that result is showing up in our historical TNL. As we have stated in the past...
Speaker Change: We expect our hash costs to continue to decline over a period of time.
Speaker Change: And those are as a result of actionable projects that we have worked on some of those that you have seen publicly announced and others as Fred mentioned are in the pipeline.
Speaker Change: As we move forward from here, we expect the Bitcoin mining to be, you know, the sector every four years, there's a having event that happens and, you know, the expectation is the Bitcoin price is going to go up.
Speaker Change: We are building our company in a position where we don't have to rely on the Bitcoin price or the best price to continue to grow gold.
Speaker Change: Go up, we expect it to go up and we expect it to create significant value for us.
Speaker Change: but we are prepared for the downside situation and that's why it's very important for us to be
Speaker Change: to be sourcing megawatts that are closer to the low-cost environment. For example, the two announcements that we had in Q1, the 139 megawatts generation of electricity from our own source, one of them is the Renfarm in Texas.
Speaker Change: And that's about a hundred and fourteen megawatts planned and that that results in a significant reduction in our cost because we consume electricity during the time and the wind blows and then the bridge is congested.
Speaker Change: and the bridge loves that because we are able to decongest the grid.
Speaker Change: while hashing at the peak hours, and we don't have to mind when the electricity is expensive, so that's the kind of model
Speaker Change: that helps us drive our costs down. One point that I want to mention is that while the sector is focused on...
Speaker Change: You know, specific KPIs, for example, some companies, some of our peers are very focused on jewels for trash, some of them are very focused on uptime, no doubt that these are important
Speaker Change: But you have to view what value does that create for your stockholders? And our focus is the value creation for our stockholders. The uptime could be compromised for that.
Speaker Change: The Jewels Procure Hash could be lower depending on the pricing where you get there as long as it creates the most value for our stockholders and that's where our eyes are focused on and that's exactly what we believe is going to drive our cash cost further down from here.
Great. Thank you, and you can think of it as
Speaker Change: as when you have your own generation and your energy price is...
You know, substantially lower than-
Three or two cents a kilowatt hour.
Speaker Change: Then, all of a sudden, it opens up the ability to use maybe slightly less efficient machines
Speaker Change: and if we're able to deprecate machines that have already been fully depreciated from our group's hatch sites and reuse those behind the meaner at these intermittent sites, your hatched cost drops very significantly.
and you don't have the need to operate.
Speaker Change: 99% of the uptime because the machines are depreciated and so they've already been paid for. And so every kilowatt hour you can operate, especially that you can operate at these low power
Speaker Change: is a profitable hour. And so we believe that over time, as we continue to grow the fleet of what we call our AARP fleet, our advanced AARP replacement fleet or retirement fleet.
Speaker Change: then that will have a very positive impact on the overall hash costs going forward. It also gives us a secondary advantage, which is...
Speaker Change: You know, if you're only doing grid attached like some of our peers do, every three or four years you have to replace your fleet to stay competitive because you're paying a fixed price DPA and potentially even that energy cost is going up due to demand on the grid.
Speaker Change: and then you sell off those machines and you buy new machines. By being able to retire our machines into a graceful program of retirement at these behind the mirror sites,
Speaker Change: Our hash rate isn't decreased in the same way that our peers is where they're having to do net zero replacements. We're able to maintain a certain amount of hash rate and buy incremental hash rate to add that. It also gives us the ability to even buy other people's retired machines.
Speaker Change: And, you know, if you can buy a machine that is only a third less efficient than a state-of-the-art machine, but you're only going to pay a third of the price for it, that's actually very beneficial. So we believe this is the right strategy going forward as we continue to scale.
and many more. Thank you. Thank you.
Thank you.
And can you address sort of the concerns?
Speaker Change: that lower hash costs of pretty off-grid mining may be offset by trade-offs, like reduced, and you can't touch on this reduced rig up time, higher operational expenses.
Speaker Change: and elevated capital expenditures. And sort of maybe how do you see the IRR for off-grid Bitcoin mining sites compared to grid connected sites? And I know you touched on some of the economics of the wind farm in the shareholder letter, so maybe just elaborate on that.
Yes, I think if you look at-
Speaker Change: In the case of the wind farm, for example, the infrastructure cost as stated in the shareholder
Speaker Change: then what you would be paying in a traditional great attach, because we're able to use these...
Speaker Change: Let's just call it retired infrastructure, meaning miners and containers, etc. And when you marry that with at a wind farm,
Speaker Change: You don't have an input cost for your energy, right? That wind farm, your energy cost marginally is, you know, just to put a number out there, say 1 cent per kilowatt hour for your own end.
Speaker Change: That essentially gives you besting class operating cost when you look at the minimal cost of the infrastructure and the power cost. So if you can operate 60% of the time.
Speaker Change: That's a great opportunity right there. If you can operate 70% of the time it's amazing and some of these wind assets
have fairly good uptime.
Speaker Change: which allows you to operate that way. In the case of the flare gas, you're operating 24-7 at very low cost.
And so those types of sites are, again, very profitable.
Speaker Change: And as you go to these public private partnerships, you can operate intermittently, especially if the price of energy that you're paying is similar to that of a wind farm.
Or a flare gas site, so...
We believe that this concept of Bitcoin…
going from being a 99% uptime operation.
Speaker Change: To becoming more of an intermittent operation that's able to shape, load, to meet the demands of the energy companies, you become a very attractive partner for the energy companies.
Speaker Change: But it also requires that you have systems that allow you to shape your load to the energy of companies supply. And that's been a big focus of our technology team over the past year.
Speaker Change: Thanks, Fred. Just to add to that, the ARP program that we talked about earlier.
Speaker Change: The IRRs for those are significantly higher than a traditional model.
Speaker Change: and even with the depressed hash-friess assumption, we expect the IRRs to be in the range of 30 to 40 percent.
Speaker Change: and this is the depressed and price environment on the hash price, very conservative.
when it comes to the cost for coin.
or Energy Cost.
Speaker Change: You think about Fred mentioned, electricity costs about $40 per megawatt hour, all in cost probably $50-55 per megawatt hour for traditional Bitcoin mining out there today.
Speaker Change: $10 per megawatt hour. So as you can see we're systematically going into the direction of going closer to the lower cost operations that will drive our cost further down from here as we have talked about previously.
Speaker Change: Thanks, Salman. I want to turn to AI real quick in the two-pick. I mean, can you maybe share more early market feedback from your 30 megawatt two-pick immersion pilot project and what's going on there? And then what specific revenue opportunities do you see emerging from commercial deployments with two-pick and AI data centers?
and many more. Thank you. Thank you.
Speaker Change: So the two pick deployments we've done today have been done with Bitcoin mining operations and that's kind of an ideal way to ring out the
Speaker Change: and these bugs, if you would, of these systems, and what we're finding there.
Speaker Change: is that we have an ability to substantially overclock systems. So, you know, if you think of it this way, if you need 100 minors operating at nameplate capacity.
Speaker Change: to essentially operate a site and you have the ability to overclock them by 50%. It means you could reduce the number of minors you actually have to buy by a third. And minors being one of the most expensive components in thin.
of Deployment, that Capuch Savings is substantial, and the Savings is...
Speaker Change: significantly outweighs any marginal increase in cost of the two-phase immersion costs. In AI, it's even more that way because of your ability to overclock your GPUs.
Speaker Change: New types of cooling technology, and we are specifically designing two-phase liquid cold-plate technology, which is a plug-in replacement essentially to existing cylinders today.
So that we'll have a cooling technology that helps [inaudible]
Speaker Change: People deploying AI to transition from rack mount systems over time to two-phase liquid immersion technology. But they'll be able to begin using our liquid cold plate solutions today.
Speaker Change: to lower the costs of their cooling. And again, we don't use water in our systems.
and so we are environmentally friendlier in those spaces.
Speaker Change: and we fully expect to see some really exciting opportunities there. We're currently deploying getting ready to deploy pilots with multiple compute OEMs on the AI site, testing solutions.
Speaker Change: across a broad set of applications and configurations such that we're able to really characterize the benefits for each of these OEMs. In the AI market we believe
Speaker Change: The key thing is to partner with the compute OEMs such that they use you as a reference.
Speaker Change: of what people should use for cooling. It dramatically decreases the sales friction and dramatically increases the potential demand for the product. And two pickers, only one of the many solutions we intend to bring.
Speaker Change: to the AI and Digital Infrastructure Market. Over time, certain tensions to play a broader swath of solutions and services.
Speaker Change: to them, such that they can leverage things like our power management, capabilities, orchestration and other things. So we're very excited about what this market is going to bring.
and we think two-pick and our liquid cold plate.
Speaker Change: Solutions are a great market entry vehicle for us, as the AI technology industry continues to develop and as they advance into hover and hover processors.
Speaker Change: Thanks, Fred. And I want to touch on a couple things here. I know that's one of the time. But one, I mean, maybe just wrapping it all together. So you recently did the RDI and Series C funding round. I was wondering if you can maybe, you know, if you can disclose your ownership stake there. And if you're interested in pursuing a majority position or potential vertical integration in the future one. [inaudible]
Speaker Change: Yeah, maybe just talk about how the tariffs imposed by the Trump administration are impacting, you know, procuring mining rigs. I think you spent about 136 million in cat-backs in Q1. It's split roughly 70-30 between rigs and infrastructure. So...
Speaker Change: Maybe you can combine all that in a one. Thank you.
Speaker Change: You know, one of the reasons we were very involved in founding the company was because...
Speaker Change: Developing semi-conductors is very expensive and we felt it would be best done leveraging institutional investment dollars.
Speaker Change: Today, the investors in Ordheim include people like Mayfield, Celesta, Samson, and many others. And one of the board members on.
Speaker Change: that serves together with me on Ordheim's board is Lippu, the CEO of Intel.
Speaker Change: So Oradine is very focused on solutions outside of Bitcoin mining as well. The Bitcoin mining chip, which were the predominant customer of, is amazing.
Speaker Change: very power-efficient and has a set of features that allow us to do all sorts of...
Very special things in relation to dealing with...
Speaker Change: The Energy Efficiency and how the chip operates towards a set target, whether that be tax rate, energy efficiency, or maximal Bitcoin production.
Speaker Change: All the things that Dorodine are doing are related to which they've announced.
related to AI infrastructure, technology around networks, which is...
which is a super exciting product.
Speaker Change: Cardigan has already spun off an AI security technology business. And if...
Speaker Change: They keep doing the great job that they're doing. It's going to be a very valuable investment for Mara to have, but it's not something we'll make captive anytime soon. It's just doesn't make sense for us. As you look at...
You know, other aspects of tariffs and things like that.
Speaker Change: As we mentioned in the shareholder letter, we've now begun manufacturing our own miners.
Speaker Change: And obviously, we've been working to develop a supply chain around that.
that enables us to...
Speaker Change: Optimize and have agility, if you would, in what we're doing, such that we're minimizing as much as we possibly can the impact of tariffs. If you think about a minor, the vast majority of the cost of a Bitcoin minor are the A6.
Speaker Change: And so, again, the relationship we have with Ardine gives us the opportunity to keep our costs down and control the supply chain such that.
Speaker Change: We can ensure our own supply, but more importantly, we can minimize the impact of tariffs as relates to the infrastructure that we use.
Thank you.
You know
Speaker Change: He's going to have an impact, obviously steel metal things that you use to do containerized solutions or impacted by tariffs and I think we'll be impacted in that area of the sameness.
Speaker Change: Anybody else would, but again we have a very strong supply chain team that work for us and especially with two pick and building our own
Technology Solutions around Containerization and Infrastructure
Speaker Change: We're going to optimize on a continual basis, according to how tariffs go. I think my personal belief is that I think we'll see trade deals announced on kind of a continual basis here over the next months.
Speaker Change: that will ameliorate a lot of the concerns for industries. But I think that that will continue to be a challenge with.
Speaker Change: Terrace-related China, and I think that the more that you can source outside of China, the better things will be.
Speaker Change: And then just lastly on that topic of tariffs, as we continue to grow our business outside of the US, you know, that's a very different tariff picture when you're buying miners.
Speaker Change: or you're buying infrastructure and you're having that delivered somewhere outside the U.S.
and many more. Thank you. Thank you.
Thank you, Fred.
Speaker Change: So, in March, Mara established a new $2 billion at the market equity facility and it's hoping you could discuss sort of the strategic rationale for choosing an ATM program overtaking on maybe additional leverage and outlying your priorities for deploying these funds in 25 and beyond.
Speaker Change: and many more. Thank you. Thank you. Thank you. Thank you.
Speaker Change: and some converts. In our history, we have done some converts back in 2021.
Speaker Change: and put some leverage on the balance sheet and bought Bitcoin. And then we also did 0% coupon last year to buy Bitcoin as you remember in the Q3Q4 time frame. Our usage last year for the ATM was less than 50% of our total source of capital as a result of that.
Speaker Change: So, when we look at our capital profile and our sources of capital with the growth plans, we look at what are the best source of
Source of cash and source of reading capital for that.
We are not in the market every day [inaudible]
We, we, we, we opportunistically look at, there are some very specific, specific KPI driven.
Speaker Change: Capital Race Program that we haven't instituted over the last few years.
and that is where staff vote for us now.
Speaker Change: When we think about raising capital, the capital has to be deployed in the creative projects and that's why our threshold has been very high in terms of what how do we allocate our capital and what kind of rate of returns do we expect.
Speaker Change: and as we had talked about a few moments ago, the projects that we would expect to...
Speaker Change: Seeing future are going to squeeze more value out of the same investment that we had done in the past, the other thing that we have been focused on is another KPI which is Return on Capital Employee.
Speaker Change: and yes, cordial record rate can, it can't fluctuate depending on the Bitcoin price, but when you look at it on a long-term perspective,
Speaker Change: It is one of the most helliest in the sector. And we take pride in that, but not only that, but we keep an eye on that as to when we invest our capital and utilize it. We have prudent balance sheet management and preserve our flexibility to the source of capital available.
Thanks, Helen, and the last one for me.
Speaker Change: You know, you have this full huddle approach that's your Bitcoin Treasury policy that you've opted in July of 24, you know, you've seen other kind of miners in the market now starting to, you know, liquidate Bitcoin that's mine and so forth. And do you plan to sort of maintain the strategy through 25 and beyond and sort of what factors or market dynamics might prompt Mara to reconsider or sell some of its monthly production?
Speaker Change: Yeah, I mean, when you think about about Mara, so the distinguishing feature that Mara versus Look, investors have opportunities to invest in either a Bitcoin hotler who is going out and buying Bitcoin from the open market at the spot price.
which by the way is right now 103,000.
Speaker Change: or people like to invest in minors like us who are pure K minors and they have...
Speaker Change: For example, our cost per coin is one of the most in the sector, so any upside from the cost per coin to the Bitcoin price
Speaker Change: and our stockholders benefit from that as the bull price kicks in.
Speaker Change: What Mara is doing is a twin turbocharged strategy, if you're a car owner, you would know that if you drive a base model or if you drive a single-turbo engine, there are differences and then when you drive a twin-turbo engine, you see the benefit of both the sides.
Speaker Change: and that portfolio approach across the board is really attractive in our humble view from a long-term perspective and we expect
Speaker Change: We expect that to pay off our stockholders from a longer perspective as the Bitcoin price increases from here. So going back to the HODL approach last year, we went on full HODL strategy. We looked at the market conditions, we looked at the political...
Speaker Change: Bill Wins and the Macros, and it made a lot of sense to go out and hovel and be accumulated that Bitcoin that we have installed, and we also went out and bought Bitcoin by raising and doing converse, the Rippercent coupon converse last year.
Speaker Change: and that was the best use of our capital at that point in time. Now, we're not...
Speaker Change: You know, as you notice that we are primarily a Bitcoin miner, but at the same time, our stockholders benefit from the model, the second largest model, and we're wide, as far as we know, over 48,000 coins today.
Thank you guys very much. Appreciate it.
Thank you. Thanks Steve.
Speaker Change: Thanks Steve, appreciate the questions. We're going to pass on taking retail questions today as most of them are already addressed on today's call. Thanks everyone again for joining us.
Speaker Change: If you have questions that were not answered during today's call, please feel free to contact our Invest Relations team at pir at mora.com. Thank you very much and enjoy the rest of the day.
Speaker Change: Thank you. This does conclude today's conference. We thank you for your participation. You may disconnect your lines at this time and have a wonderful day.