MARA Holdings (MARA.US) Q3 Earnings Call: Management Says Two AI/HPC Leases Targeted for Signing Within the Year; Total Debt Cut 37% Year-to-Date

Beijing time, November 10 MARA Holdings (MARA.US) reported its third-quarter 2026 results and held a conference call. The company is at a critical stage of its transformation from a Bitcoin miner into an "energy-backed digital infrastructure company." The focus of this call was the signing progress of AI/HPC data center leases and its Bitcoin disposal strategy management said on the call that it is striving to sign two data center leases before year-end, but "the market environment is fluid, and timing could slip into next year"; the company has already sold approximately 13,597 bitcoins after the quarter ended, raising about US$1.1 billion, of which US$750 million was used to fully repay its bitcoin-backed loan, and it added a new share repurchase authorization of up to US$500 million. CEO Fred Thiel emphasized: "Bitcoin laid the foundation. Power brings the opportunity. Our strategy now is simple: maximize the value of every megawatt (MW) we control." On results: the company reported third-quarter revenue of US$164.2 million, down 35% year-over-year and below the consensus estimate of US$181.9 million, mainly due to a 37% year-over-year decline in the average price of bitcoins mined (partially offset by higher output); net income of US$632.1 million (diluted EPS of US$1.28), far exceeding market expectations (which had anticipated a loss of US$0.20 per share), versus US$123.1 million in the year-ago period but the profit growth was mainly driven by an US$885.3 million unrealized fair value gain from the rise in bitcoin prices during the quarter. Adjusted EBITDA was US$857.7 million (US$395.6 million in the year-ago period). On operating metrics: energized hashrate rose to 71.2 EH/s (+18% year-over-year); power cost at self-operated sites was US$0.04/kWh, and the purchased energy cost per bitcoin at owned sites was US$39,674; the company mined 2,247 bitcoins during the quarter and sold 3,891 at an average price of US$75,300. The results were released after the close; the stock rose as much as 0.9% to US$6.70 in after-hours trading (52-week trading range of US$5.81 to US$16.62). Focus and response: AI/HPC leases "just need signing," bitcoin sales to repay debt reshape the balance sheet The core focus of the call was the slow conversion of the company's vast power assets into AI/HPC lease revenue as of this quarter, the company had no formally signed AI/HPC leases. H.C. Wainwright analyst Michael Colonnese pressed on how lease terms are evolving in the current macro environment. Thiel responded that tenants are "double-clicking and triple-clicking" on due diligence reviewing power contracts and environmental permitting risk; the company is advancing pre-development (power infrastructure, network, site) ahead of signing, "we won't start building buildings without a tenant, but we'll have the power infrastructure, the network ready to go." On the pace of bitcoin sales, CFO Salman Khan said bitcoin is a strategic asset and source of capital, and the company has ample liquidity to meet all obligations including convertible note put rights; the joint venture model with Starwood is a "light-capital strategy," and under the partnership scenario the net amount MARA actually needs to spend is small. Management's message was clear: demand is real, due diligence is intensive, and MARA aims to be "a developer that delivers, not a developer that promises." Transformation strategy: 1.9GW power portfolio, targeting 4.8GW The company currently has approximately 1.9GW of energized capacity across nearly 20 sites on four continents, with a clear path to approximately 4.8GW. The Long Ridge natural gas plant project has received FERC (Federal Energy Regulatory Commission) approval and is expected to close within the coming weeks the plant is currently permitted to sell 485 MW of power, expected to rise to 505 MW of nameplate capacity in the first half of 2027, which will provide contracted cash flow on the generation side and comes with more than 1,600 acres of contiguous land. Pre-development at the Kearney site is progressing well, and it is a leading candidate for the first signing. Management positions bitcoin mining as the "operating base" keeping sites running and generating revenue while higher-value infrastructure is developed. Exaion and AI/cloud business: US$79 million contract signed, US$3 billion pipeline awaiting conversion Controlled subsidiary Exaion signed a four-year, US$79 million GPU-as-a-service contract with its first U.S. customer, on 100% take-or-pay terms. In the Q&A, Thiel disclosed that the contract uses already-ordered B300 GPUs, delivering from this month through early December, deployed in Exaion's existing capacity in France, with revenue-generating service by year-end; "Exaion's build plan does not depend on MARA developing anything for it in the U.S. it's based on building capacity independently in Europe and Canada." Exaion's potential business totals more than US$3 billion in contract value, of which about US$1 billion is targeted for delivery by the end of 2027 but management made clear these are not yet signed. Hosting contract exits and cost curve: Vertebrai curtailment rate nearly halved Third-party hosting arrangements accounting for about 29% of total energy capacity begin expiring from Q3 2027 and will all end by Q1 2028; Khan said the related capacity will be replaced by miner upgrades at other sites, hosting costs will be eliminated, and cost per kWh will improve further. Progress at energy compute platform Vertebrai: by directing curtailed power to on-site compute, the curtailment rate at a Texas wind farm fell from an estimated 46% between April and September 2026 to 22%. Power cost at self-operated sites held at US$0.04/kWh for the quarter, purchased energy cost per bitcoin was US$39,674, and cost per PH per day improved 2% quarter-over-quarter. Balance sheet and capital allocation: total debt cut 37%, new US$500 million buyback The company has reduced total debt by US$1.4 billion year-to-date, representing 37% of total debt at the start of the year. After the quarter ended, the company sold 13,597 bitcoins for about US$1.1 billion, of which US$750 million fully repaid its bitcoin-backed term loan, releasing and recovering 17,477 bitcoins previously pledged as collateral. As of September 30, the company held 34,012 bitcoins (including those lent or pledged) and US$946.5 million in cash and cash equivalents; during the quarter it arranged a loan to finance the Long Ridge plant acquisition. The company also announced a new share repurchase authorization of up to US$500 million and said it will continue selling bitcoins to build cash for AI infrastructure, convertible note obligations and potential buybacks. Q&A highlights: Texas politics and mining positioning Asked about the impact of the Texas government transition on the Matagorda project (question from Rosenblatt analyst Christopher Brendler), Thiel said contract terms were unchanged and the deal was structured so the company has no payment obligation until the ERCOT Batch Zero process is fully approved "Matagorda is a phenomenal site, adjacent to a nuclear plant, with all the high-voltage infrastructure already in place." Conference call summary I. Executive remarks Fred Thiel (Chairman and CEO): (compiled from the shareholder letter and call reports) Bitcoin laid the foundation; power brings the opportunity. Our strategy is now simple: maximize the value of every megawatt we control. In Q3 2026, we began transforming the assembled platform into a business designed to generate durable, contracted returns. Over the past few years, MARA has built a combination that is hard to replicate energized assets, operating infrastructure and technical capability. Our priority now is to convert these advantages into signed customer agreements, completed projects and durable free cash flow. Progress was made across every line this quarter: on sites and development, engineering and operations teams hosted prospective tenants at nearly all sites, and pre-development at Kearney is progressing well; we are striving to sign two leases before year-end, but the market environment is fluid and timing could slip into next year. On power, the Long Ridge project has received FERC approval and is expected to close within the coming weeks 485 MW of permitted sales capacity, expected to rise to 505 MW of nameplate capacity in the first half of 2027, with more than 1,600 acres of contiguous land included. Bitcoin mining remains the core business, with AI infrastructure and the Exaion cloud platform as growth areas. Salman Khan (CFO): Financial highlights: revenue of US$164.2 million, down 35% year-over-year, mainly due to a 37% year-over-year decline in the average price of bitcoins mined (partially offset by higher output); net income of US$632.1 million, including an US$885.3 million unrealized fair value gain on bitcoin; adjusted EBITDA of US$857.7 million. Energized hashrate of 71.2 EH/s, +18% year-over-year; 644 blocks won during the quarter (+2% year-over-year); cost per PH per day improved 2% quarter-over-quarter; power cost at self-operated sites of US$0.04/kWh, purchased energy cost per bitcoin of US$39,674. During the quarter the company mined 2,247 bitcoins and sold 3,891 at an average price of US$75,300, and purchased no bitcoins. Total debt has been reduced by US$1.4 billion year-to-date (37% of total debt at the start of the year). Third-party hosting arrangements accounting for about 29% of total energy capacity begin expiring from Q3 2027 and will all end by Q1 2028 at which point hosting costs will be eliminated and cost per kWh will improve; the freed-up capacity will be replaced by miner upgrades at other sites to maintain hashrate. II. Q&A summary Michael Colonnese (H.C. Wainwright): How are lease terms evolving in the current macro environment? Fred Thiel: Tenants are "double-clicking and triple-clicking" on due diligence reviewing power contracts and environmental permitting risk. We are advancing pre-development without signed leases: "we won't start building buildings without a tenant, but we'll do the power infrastructure, the network and so on, to make sure we're ready to go." Kevin Dede (JonesTrading): Where does Exaion's power come from? What is the path from US$1 billion to US$3 billion in contract value? Fred Thiel: The first contract uses already-ordered B300 GPUs, delivering from this month through early December, deployed in Exaion's existing capacity in France, with revenue-generating service by year-end. "Exaion's build plan does not depend on MARA developing anything for it in the U.S. it's really based on building capacity independently in Europe and Canada." Christopher Brendler (Rosenblatt): Will the Texas government transition affect the Matagorda project? Fred Thiel: The contract is unchanged, and the deal is structured so the company has no obligation until the ERCOT Batch Zero process is fully approved. "Matagorda is a phenomenal site. It's adjacent to a nuclear plant, and all the high-voltage infrastructure is already in place." On the pace of bitcoin sales (CFO response): Bitcoin is a strategic asset and source of capital; the company has ample liquidity to meet obligations including convertible note put rights; the joint venture with Starwood is a "light-capital strategy" "under the partnership scenario, the net amount MARA needs to spend is a light-capital strategy."