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Marathon Holdings reported a difficult first quarter of 2026, posting a $1.3 billion net loss as revenue fell and operating costs rose amid lower bitcoin prices. The company also outlined steps to reduce leverage and shift part of its strategy toward artificial intelligence (AI) infrastructure.
In a letter to shareholders released May 11, Marathon said revenue for the quarter totaled $174.6 million, down $39.3 million from $213.9 million in the first quarter of 2025. The company attributed the decline primarily to an 18% decrease in the average price of bitcoin, which accounted for $33.1 million of the revenue drop.
Marathon added that $2.5 million of the decline was linked to reduced bitcoin production, while $3.7 million came from lower other revenue.
Despite the revenue pressure, Marathon reported a 33% increase in hashrate, rising from 54.3 EH/s in the first quarter of 2025 to 72.2 EH/s in the first quarter of 2026. The company said the combination of reduced revenue and higher operating costs contributed to the large net loss.
Marathon recorded a $1.3 billion net loss in the quarter, compared with a net loss of $533.4 million in the same period last year (or $1.55 per diluted share). The company said overhead increased by $729 million in the first three months of 2026.
Marathon stated: “The $729.0 million increase in net loss was primarily driven by a $520.4 million increase in operating loss, largely due to unfavorable bitcoin mark-to-market adjustments of ($1.0 billion) and restructuring costs of $45.9 million during the quarter.”
Marathon said it is repositioning beyond cryptocurrency mining and into the AI infrastructure market. As part of that effort, it used bitcoin sales to reduce debt and fund the strategy.
During the quarter, Marathon sold approximately $1.5 billion of bitcoin. The letter said the proceeds were used to repurchase, at a discount, over $1 billion of the face value of its 2030 and 2031 notes and to reduce its line of credit by $200 million.
The company also refinanced $150 million of its line of credit at a 7% interest rate, down from the 10.5% it previously paid.
Marathon said it views reducing debt through monetizing bitcoin as reflecting confidence in the cryptocurrency as a reserve asset. At the end of the quarter, the company held 35,303 bitcoin, including 9,995 bitcoin loaned or pledged as collateral.
During the first quarter of 2026, Marathon mined 2,247 BTC. Based on a spot price of $68,222 per bitcoin, the value of its bitcoin holdings was approximately $2.4 billion.
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