Surge in Operating Costs
Digital infrastructure company Marathon Holdings attributed a decline in revenue in the first quarter of 2026 to a decrease in the U.S. dollar value of bitcoin during the period. According to a letter to shareholders released May 11, revenue in the quarter reached $174.6 million, a $39.3 million decline from the $213.9 million recorded in the first quarter of 2025.
The letter revealed that an 18% decrease in the average price of bitcoin accounted for $33.1 million of the decline, while $2.5 million was attributed to a reduction in bitcoin production. The remaining $3.7 million was attributed to a drop in other revenue. The losses occurred despite a 33% increase in the hashrate, which rose from 54.3 EH/s in the first quarter of 2025 to 72.2 EH/s.
Reduced revenue, coupled with a surge in operating costs, led Marathon to register a $1.3 billion net loss during the quarter. During the same period last year, the firm recorded a net loss of $533.4 million, or $1.55 per diluted share, meaning overheads increased by $729 million in the first three months of 2026.
“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,” the letter stated.
Marathon’s latest loss-making quarter comes at a pivotal moment for the company as it seeks to reposition itself beyond cryptocurrency mining and into the rapidly expanding artificial intelligence (AI) infrastructure market. The shift reflects a broader trend among Bitcoin miners facing tighter margins, higher operating costs, and increasing uncertainty in the post-halving environment.
Meanwhile, besides directing more resources toward AI-supporting data centers, Marathon used its bitcoin holdings to fund the retirement of 30% of its outstanding convertible debt at a discount. The move reportedly reduced leverage, lowered potential future dilution, and improved Marathon’s “ability to allocate capital toward higher-return strategic opportunities.”
“During the quarter, we sold approximately $1.5 billion of bitcoin. These funds were used to repurchase, at a discount, over $1 billion of the face value of our 2030 and 2031 notes, and reduce our line of credit by $200 million,” the letter explained.
Additionally, Marathon refinanced $150 million of its line of credit at a 7% interest rate, down from the 10.5% it previously paid.
Despite diversifying from bitcoin mining, Marathon said reducing its debt by monetizing bitcoin reflects its confidence in the cryptocurrency as an important reserve asset. Consequently, at the end of the quarter, Marathon held 35,303 bitcoin, including 9,995 bitcoin loaned or pledged as collateral. During the first quarter of 2026, it mined 2,247 BTC, bringing the value of its bitcoin holdings to approximately $2.4 billion based on a spot price of $68,222 per bitcoin.
