Marathon Digital Swings to $123 Million Profit Amid Bitcoin Miner's AI-Pivot

Marathon Digital Holdings (Nasdaq: MARA) reported third-quarter 2025 net income of $123.1 million, or $0.27 per diluted share, dramatically exceeding analyst expectations of a $0.10 loss as the Bitcoin miner expands beyond its core business into AI infrastructure.

The company generated revenue of $252.4 million, up 92% year-over-year and slightly above the $251.76 million consensus estimate. The results mark a sharp reversal from the $124.8 million net loss posted in the third quarter of 2024.

Marathon's Bitcoin holdings nearly doubled over the past year, growing from approximately 27,000 to 52,850 coins, representing a 98% increase. The company ended the quarter with over $7 billion in liquid assets after issuing $1.025 billion in zero-coupon convertible notes.

Despite the positive results, shares fell 2.25% to $17.43 in after-hours trading.

CEO Fred Thiel emphasized the company's strategic evolution during an earnings call, describing Marathon as transforming "from a Bitcoin miner into a digital infrastructure leader" focused on what he called "profit per megawatt hour."

The company announced a significant partnership with MPLX, a subsidiary of Marathon Petroleum Corporation, to develop integrated power generation facilities and data centers in West Texas. The initiative provides access to low-cost natural gas for power generation, with initial capacity of 400 megawatts expandable to 1.5 gigawatts across three sites.

"Electrons are the new oil," Thiel said. "Energy is becoming the defining resource of the digital economy, powering everything from Bitcoin mining to artificial intelligence."

Marathon has begun deploying AI inference computing at its Granbury, Texas facility within modular, air-cooled containerized data centers. The company is positioning itself to provide low-cost AI inference services rather than competing in traditional hyperscale data center development.

Thiel argued that open-source AI models and specialized ASIC chips will drive down the cost of AI computing, making energy the primary constraint rather than GPU availability. Marathon aims to leverage its expertise in securing low-cost power to offer competitive "cost per token" for AI workloads.

The company is also pursuing its pending acquisition of Exxion, a subsidiary of France's EDF utility, which operates secure data centers for critical infrastructure. The acquisition would provide Marathon with expertise in private cloud solutions and existing tier-three and tier-four data center operations.

Marathon mined 2,144 Bitcoin during the quarter and purchased an additional 2,257 coins. The company's energized hash rate expanded 64% year-over-year to 60.4 exahash per second. Energy costs to mine Bitcoin averaged $39,235 per coin, with daily cost per petahash improving 15% annually.

CFO Salman Khan noted that owned and operated sites now account for approximately 70% of Marathon's nameplate megawatt capacity, supporting the company's vertical integration strategy.

Marathon targets generating 50% of revenue from international markets by 2028 and aims to expand data center capacity to 1.5 gigawatts. The company is exploring opportunities in sovereign compute and grid load management across Europe, the Middle East, and other regions.

The company discontinued near-term investment in two-phase immersion cooling technology to focus on opportunities with more immediate returns, citing that direct-to-chip cooling remains the preferred methodology for data center operators.

Marathon began opportunistically selling mined Bitcoin to fund operating expenses, aiming to limit reliance on at-the-market equity offerings to reduce shareholder dilution.