Key Takeaways
- MARA reports on November 9, after Riot fell 33% in a month on fears about how miners fund their AI plans.
- Bitcoin rose about 43% in the third quarter, so expect a large markup gain that says little about whether MARA funds itself.
- In the second quarter, mining made $30.1 million after direct costs, short of $43.9 million in overhead, and MARA sold almost every coin it mined.
- Holdings fell a third in six months to 35,577 coins at June 30, and after August’s new loans, 54% were pledged. Another drop in a rising market would be the bear case confirmed.
Riot Platforms (RIOT) fell 33% in the month to October 28 as investors questioned how bitcoin miners will pay for their AI data center plans. MARA Holdings (MARA) has dropped about as hard, and it reports third-quarter results on Monday, November 9.
The quarter itself should look good on paper. Bitcoin rose about 43% between June 30 and September 30, which lifts mining revenue and marks up the coins MARA holds. That’s why the headline profit won’t answer the real question: can mining pay MARA’s bills without the company selling more of its bitcoin, or borrowing against it?
Riot’s Slide Is a Funding Scare
Riot’s drop came as investors reassessed the financing risks of miners building AI data centers. It also has a deadline of its own: a Morgan Stanley bridge facility of up to $573 million matures on December 31.
MARA has a funding gap too. The two booked almost the same second-quarter revenue, $174 million at Riot and $174.9 million at MARA. MARA has been filling its gap with its bitcoin.
Revenue Is the Easy Part for MARA
The Street’s 2026 revenue estimate for MARA is down 13% since the end of June. Analysts now expect $707 million this year, down from $907 million in 2025. They see $805 million in 2027, then $606 million in 2028, when MARA expects bitcoin’s next halving.
To hit $707 million, MARA needs about $179 million a quarter in the second half, roughly what it booked in the June quarter. With bitcoin up as much as it was in the third quarter, matching the Street on revenue shouldn’t be hard.
Three Years Without Positive Operating Cash
MARA’s cash from operations has been negative in each of the last 12 quarters, even as spending on new machines has all but stopped.
Capex fell to $21.7 million in the June quarter from $419 million at the end of 2024, and operations still used $224 million. Part of that is accounting. MARA’s latest 10-Q says the bitcoin it mines stays out of operating cash flow until it’s sold, and the sale proceeds land in investing cash. Operating cash flow will likely be negative again on Monday whatever bitcoin did, so it’s the wrong scoreboard.
The better one is coins. In the second quarter, MARA sold 2,213 bitcoin against 2,422 mined, close to all of its production.
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Mining Hasn’t Covered the Overhead
Those coins haven’t covered much. After energy, upkeep and hosting fees, $30.1 million of second-quarter revenue was left. That’s a 17.2% mining margin, down from $105.4 million and 44.2% a year earlier. Bitcoin’s average price was 28% lower, and mining got harder across the network.
Management put overhead at $43.9 million once deal costs and a patent settlement were stripped out. So mining didn’t pay for the company’s overhead, before a dollar of interest. A higher bitcoin price in the third quarter should narrow that gap. Whether it closes is the first thing I’d check.
The Coin Marks Will Flatter the Quarter
MARA’s reported profits swing with the coin. Its EBITDA margin ranged from 355.4% to -512.2% over the last 12 quarters, because bitcoin’s fair-value marks run through the income statement.
In the June quarter, marking its bitcoin down cost $343 million, about twice that quarter’s revenue. The third quarter runs the other way. On June’s 35,577 coins alone, bitcoin’s move to about $83,570 at September 30 is worth roughly $890 million of markup. Expect a big reported profit that says almost nothing about whether the business funds itself.
The pile is what matters, because it’s also MARA’s collateral. Holdings fell by about a third, from 53,822 coins at the end of 2025 to 35,577 at June 30 (some went to retire $1.0 billion of notes in March). MARA then took out $600 million of new bitcoin-backed loans in August, and management said 54% of its coins were pledged. At June 30, the coins were worth about $2.1 billion against $2.45 billion of debt principal.
What MARA Has to Show on November 9
MARA passes the cash test only if two things hold: mining covers overhead at third-quarter prices, and the coin count stops falling. If holdings dropped again in a quarter when bitcoin rose 43%, MARA is still paying its bills out of a treasury that’s already more than half pledged. That’s the bear case behind this selloff.
The way out is the AI pivot. Management expects its first data center leases by year-end, and its $1.5 billion purchase of power business Long Ridge still awaits federal approval. A signed lease with a named tenant on Monday would matter more than any profit figure.
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