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Date

Monday, May 11, 2026 at 5 p.m. ET

Call participants

  • Chief Executive Officer — Frederick G. Thiel
  • Chief Financial Officer — Salman H. Khan
  • Investor Relations — Robert Samuels

Takeaways

  • Revenue -- $174.6 million, a decrease from $213.9 million, primarily due to an 18% lower average Bitcoin price, reducing revenue by $33.1 million, and lower production impacting $2.5 million, with an additional $3.7 million decline in other digital asset hosting services.
  • Energized hash rate -- 72.2 exahash per second, reflecting a 33% increase from 54.3 exahash per second, driven by deployment of 2.4 exahash of new-generation ASIC miners.
  • Net loss -- $1.3 billion for the quarter, compared to $533.4 million, with $1.0 billion of the net loss attributed to unrealized mark-to-market fair value adjustment for digital assets.
  • Adjusted EBITDA -- Negative $1.0 billion, compared to negative $483.6 million, driven by the Bitcoin mark-to-market effect.
  • Bitcoin production -- 2,247 BTC mined, 25 BTC per day, 39 fewer than prior period due to increased network difficulty offset partly by higher hash rate.
  • Share of mining rewards -- 5.5%, an increase from 4.8%, reflecting improved fleet optimization and efficiency.
  • Cost per kilowatt-hour -- $0.04 at owned sites, positioned among the lowest in the sector for large-scale operations.
  • Daily cost per petahash -- $27.6, a 3% improvement from $28.5, and a cumulative 42% reduction over eleven quarters.
  • General and administrative expense -- $57.7 million (excluding stock-based compensation), up from $36.9 million, due to scaling, headcount growth, and $11.0 million in acquisition and integration costs.
  • Restructuring charge -- $45.9 million related to business realignment, including 15% workforce reduction providing $12.0 million in expected annualized cost savings.
  • Convertible debt retirement -- About 30% of outstanding convertible debt retired at a discount, reducing future dilution by approximately 46 million shares, or 9% on a fully diluted basis.
  • Bitcoin monetization and debt reduction -- $1.5 billion of Bitcoin sold to buy back over $1.0 billion in face value of 2030 and 2031 notes and to pay down $200 million on the line of credit; $150 million of the line refinanced at 7%, down from 10.5%.
  • Bitcoin holdings -- 35,303 BTC at quarter-end, a decrease of 12,228, with approximately 28% pledged or loaned as collateral, generating $66.4 million of interest income in 2026.
  • Starwood joint venture progress -- Moved from announcement to execution, entered active tenant discussions at 90% of owned and operated sites, and expect to sign multiple tenant leases by year-end.
  • Long Ridge acquisition -- Definitive agreement reached post-quarter to acquire a campus with a 505 MW power plant (76% capacity contracted), $144 million in annualized adjusted EBITDA, and expansion capacity from 1.3 gigawatts to 2.2 gigawatts (65% increase), with an identified path to 2.4 gigawatts and 600 gross megawatts of AI/IT load.
  • Starwood JV economics -- Illustrative 200 MW project could yield $50 million-$100 million in net stabilized annualized cash flow at 9%-15% yield-on-cost with little to no incremental equity required.
  • Pro forma Long Ridge debt -- Upon closing, expected total pro forma debt is $900 million (down from $1.1 billion), with $400 million term loan repaid and $185 million of new secured notes anticipated; $785 million bridge loan commitment from Barclays secured as a contingency.
  • Aegion acquisition -- Majority interest acquired, advancing diversification and infrastructure strategy.
  • Operational transition -- Organization realigned toward AI/data infrastructure, with continued Bitcoin mining until data center demand repurposes capacity, supporting revenue continuity during transition.

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Risks

  • Significant net losses and mark-to-market impact -- CFO Salman H. Khan said, "Approximately $1.0 billion of this net loss for 2026 was driven by the unrealized mark-to-market fair value adjustment for digital assets, a direct reflection of the drop in Bitcoin price during the quarter."
  • Reduced Bitcoin holdings -- 12,228 BTC decrease in holdings, with $1.5 billion Bitcoin sold for debt reduction.
  • Declining revenues due to market forces -- "The decline was primarily driven by an 18% decrease in Bitcoin’s average price, which reduced revenue by $33.1 million," indicating continued exposure to cryptocurrency volatility.
  • Elevated G&A and restructuring costs -- G&A rose $20.8 million year over year, with $45.9 million in restructuring charges and $11.0 million of acquisition/integration expense, increasing near-term cost pressure during the business model pivot.

Summary

MARA Holdings (MARA +3.48%) transformed its business by accelerating into digital infrastructure via the Long Ridge acquisition, a strategic joint venture with Starwood, and a realignment targeting AI and critical IT compute segments. Management emphasized immediate cash flow from Long Ridge’s 505 MW campus, scalable to over 1 gigawatt, and described advanced conversations with multiple hyperscaler tenants. The company executed a $1.5 billion Bitcoin asset sale during the quarter, using proceeds to reduce debt with over $1.0 billion of notes redeemed at a discount, lowering outstanding convertible notes by 30%, and refinancing remaining obligations at reduced interest expense. Operating performance saw a 33% increase in energized hash rate to 72.2 exahash per second, boosting share of available mining rewards to 5.5%, while 2,247 BTC were mined amid rising network difficulty and falling average Bitcoin prices. Management stated that, with G&A and restructuring costs weighing on short-term profitability, further expense reductions and operational discipline will be realized as the realignment progresses.

  • CEO Thiel described the shift as "a quarter where we executed deliberately across multiple fronts at once and moved the company decisively forward," connecting the Long Ridge and Starwood deals as part of "a strategy that is now fully in motion."
  • Long Ridge’s "The centerpiece of the campus is an approximately 505-megawatt nameplate combined-cycle gas turbine, one of the most efficient in the entire PJM Interconnection. It generated $144 million of annualized adjusted EBITDA in 2025, with 76% contracted capacity," supporting immediate visibility into cash generation.
  • CFO Khan confirmed a 9% reduction in potential dilution by retiring convertible notes and highlighted, "we have not used our At-The-Market Equity Offering Program, or ATM, since the end of 2025. We have funded operations and balance sheet actions through Bitcoin monetization, not equity dilution."
  • The Starwood joint venture structure enables MARA Holdings to "monetize the value of its powered land portfolio, preserve significant upside in long-term cash flows, and manage capital exposure in a disciplined way."
  • Management reiterated near-term confidence in signing multiple tenant leases, emphasizing "Competition amongst the prospective tenants to get into the site."
  • Company leaders characterized AI power demand as the market's key constraint, with available, connected energy positioned as a competitive differentiator for future digital infrastructure contracts.

Industry glossary

  • PJM Interconnection: A regional transmission organization that coordinates the movement of wholesale electricity in parts of the U.S. and is considered a leading data center and power market in North America.
  • Hash rate (exahash per second): A measurement of computational power used in Bitcoin mining, indicating the number of hash calculations completed per second.
  • Behind-the-meter: Energy consumption or generation at a site that does not enter the broader grid, often for dedicated or on-site workloads such as data centers or mining.
  • Yield-on-cost: The annual stabilized cash flow return as a percentage of total development or acquisition cost, used to assess project-level profitability.
  • Agentic technology / token factory: AI deployment environments or operational models focused on high-volume model inference, often for proprietary or vertical use cases requiring flexible, dedicated compute.
  • At-The-Market Equity Offering Program (ATM): A program allowing a company to sell newly issued shares directly into the market incrementally over time.

Full Conference Call Transcript

Frederick G. Thiel: Good afternoon, everyone, and thank you for joining us. Q1 2026 was a redefining quarter for Marathon Digital Holdings, Inc., not an incremental one. This was a quarter where we executed deliberately across multiple fronts at once and moved the company decisively forward. During the quarter, we moved the Starwood joint venture from announcement to execution, closed our acquisition of a majority interest in Aegion, and retired about 30% of our outstanding convertible debt, all while realigning the organization to fit the business strategy. Shortly after quarter end, we announced a definitive agreement to acquire Long Ridge Energy and Power from FTAI Infrastructure. These were not isolated events.

They are connected pieces of a strategy that is now fully in motion. That strategy starts with a single conviction: the next phase of digital infrastructure value creation will be shaped by the control of power—where it is located, when it is available, and how it can best be monetized. AI adoption is accelerating faster than power can be brought online to meet demand. That is not an opinion. It is the defining constraint of this market. Available, connected energy is the bottleneck on AI compute growth. The ability to source, control, and dynamically allocate that power is a structural advantage.

And the lack of available power will negatively impact semiconductors related to AI if there is not sufficient capacity to absorb chip supply. Some semiconductor vendors are investing directly and locking up demand, as evidenced by NVIDIA’s recent investments. Marathon Digital Holdings, Inc. has positioned itself squarely in the bull’s-eye, with already-energized power to enable hyperscalers to, in the near term, energize compute with our previously 1.9 gigawatts of power capacity and now, with the addition of Long Ridge, we are having advanced conversations with multiple prospective tenants across multiple sites. Let me start with Long Ridge. We view Long Ridge as a land and power acquisition to develop a premier compute campus.

It is a strategic enabler for our existing Hannibal operations, adding to the site 1,600 acres with a path to grow the existing 200 megawatts power to over 1 gigawatt. It will establish a leading AI/HPC data center campus in the PJM Interconnection, one of the most active data center and power markets in North America. In a market where power and infrastructure constraints take years to solve, Long Ridge gives us exactly what is needed to deliver value to shareholders upon closing. This is not a greenfield site.

It is a site that is already operational, already generating cash, and that gives us immediate access to the infrastructure, interconnection, physical footprint, and resources required to scale to over 1 gigawatt. The power is there. The land is there. The water is there. The fuel supply is there. And the interconnection is there. The centerpiece of the campus is an approximately 505-megawatt nameplate combined-cycle gas turbine, one of the most efficient in the entire PJM Interconnection. It generated $144 million of annualized adjusted EBITDA in 2025, with 76% contracted capacity. This is stable, visible cash flow from the moment we close the transaction.

Beyond the power plant, the campus consists of over 1,600 contiguous acres and includes the 200 megawatts of Marathon Digital Holdings, Inc.’s existing capacity at Hannibal. As of signing, we have already submitted plans to augment the Hannibal interconnect, and we will move quickly post-close to further expand power capacity at the power plant. At close, we plan to retain Long Ridge’s skilled team consisting of about 25 full-time employees that have deep operational knowledge of the facility. They will supplement our existing energy asset operating expertise. Here is what matters most about the scarcity of this asset.

If you tried to build this from scratch today—the land, the power, the permitting, the water, the interconnection—you are looking at $2 billion to $3 billion of capital and seven to ten years of development time. We are stepping into a platform that is already built, already operational, and already generating cash flow. Assets like this are very hard to come by. Some might even call it a unicorn. So when they do appear, you move. In total, Long Ridge gives us over 1 gigawatt of total potential capacity and a path to scale to 600 gross megawatts of AI and critical IT load over time.

This transaction increases our owned and operating capacity by approximately 65%, taking us from about 1.3 gigawatts of energized capacity today to roughly 2.2 gigawatts by closing and, including expansion capacity, to 2.4 gigawatts. We have been actively engaged with multiple top-tier potential tenants around this asset. These conversations are now accelerating since announcing this transaction. The current plan calls for an initial 100 megawatts of AI buildout, with construction beginning around 2027 and initial capacity coming online in mid-2028. The power plant is not the end product. It is the enabler. It provides reliable control over an increasingly scarce input at a cost of approximately $15 per megawatt-hour.

This is a cost position that very few can match, as well as a positive cash flow tomorrow. And to be clear, our existing Bitcoin mining operations at Hannibal will continue without interruption until such time as the data center campus needs the power. Marathon Digital Holdings, Inc. does not expect to reduce Long Ridge’s current supply of power into the PJM grid. As we develop compute capacity behind the meter, we will pair that demand with incremental generation over time. Our goal is to continue to operate Long Ridge Energy and ensure that customers continue to benefit from the reliable power they have been accustomed to.

Taken together, Long Ridge gives Marathon Digital Holdings, Inc. a scaled power-advantage platform, immediate and durable cash flow, and a clear path to build one of the leading digital infrastructure campuses in this market. Next, I would like to talk about our strategic partnership with Starwood, which made meaningful progress during the quarter. We moved from announcement to execution, advancing permitting and site preparations across our portfolio, and entering active tenant discussions with multiple counterparties, including hyperscalers, across 90% of our existing owned and operated sites, including the Long Ridge campus.

I want to take a moment to explain why the structure of this partnership matters, because it is fundamentally different from a traditional lease, and that distinction has real economic benefits for Marathon Digital Holdings, Inc. and its shareholders. First, Starwood is a trusted institutional counterparty with global investment expertise and a dedicated data center development platform. Their team has developed, built, and put into operations more than 7 gigawatts of data center capacity worldwide for premier tenants. This means Starwood is a trusted counterparty, having negotiated multiple leases with premier tenants, which we believe accelerates the timeline for site evaluation and lease signing—something we have already seen. Second, Starwood brings captive development and EPC capabilities.

They lead design, development, construction, and facility operations, giving Marathon Digital Holdings, Inc. an experienced execution partner without having to source and manage third-party contractors. Additionally, their prior experience constructing sites for premier tenants provides enhanced certainty regarding their ability to develop on tenant timelines and technical requirements. This trust factor provides prospective tenants more confidence that their timelines and specifications will be met. Our peers who have never done this before still need to build trust with prospective tenants because they lack a proven track record. Third, the structure is capital efficient. When Marathon Digital Holdings, Inc. contributes sites, their value is determined using pre-agreed, site-specific economics tied to power, land, interconnection, and development attributes.

That value gives more equity credit in the project before joint venture cash contributions are required. To put this in context, on an illustrative 200-megawatt project, Marathon Digital Holdings, Inc. could generate approximately $50 million to $100 million of net annualized stabilized cash flow based on a 9% to 15% yield-on-cost range with little to no incremental equity required beyond the value of the site we contribute. As projects scale, the structure naturally evolves. Marathon Digital Holdings, Inc.’s site contribution is fixed, so for larger developments, the incremental growth capital becomes more proportioned between the partners.

At that point, the funding model starts to look more like a traditional data center development structure, including the use of construction financing that can support roughly 80% loan-to-value. The key point is that this model allows Marathon Digital Holdings, Inc. to monetize the value of its powered land portfolio, preserve significant upside in long-term cash flows, and manage capital exposure in a disciplined way. Most critically, this is not designed to be a one-time transaction. As we continue to aggregate land and power assets, our goal is to contribute sites into the structure repeatedly. Starwood is a capital-efficient engine for turning Marathon Digital Holdings, Inc.’s powered land portfolio into contracted, institutional-grade digital infrastructure at scale.

We expect to sign multiple tenant leases by year-end. As the pipeline converts, we will disclose contracted megawatts. While the Starwood joint venture addresses the large-scale hyperscale end of the AI infrastructure market, Excion addresses a different but equally important segment: sovereign, enterprise, and private cloud AI compute. Together, they give Marathon Digital Holdings, Inc. two distinct pathways into AI, both grounded in the same foundation of energy-backed infrastructure, both serving real and growing demand. Governments and enterprises, particularly across Europe and Canada, are increasingly unwilling to rely solely on hyperscale platforms for their AI infrastructure due to data sovereignty and cost. They want control over compute, data autonomy, jurisdictional compliance, security, and independence. This is not a niche requirement.

As AI policy evolves and data sovereignty standards tighten, a meaningful share of AI workloads will require infrastructure that is compliance-ready, jurisdictionally controlled, and trusted. Excion is built to serve exactly that demand. We continue to build on our proven success in the UAE, Finland, and our recent launch in Oman. We are in active discussions with major energy companies in France, Brazil, and Saudi Arabia across energy-rich regions where reliable, scalable power supports long-term digital infrastructure development. We are still early, and we will share a more detailed roadmap as this effort develops. The simplest way to think about it is: Starwood and Excion are different expressions of the same thesis. The JV pursues large-scale colocation for hyperscalers.

Excion pursues private cloud, sovereign AI, and enterprise deployments in regulated markets where these are critical criteria. Both depend on Marathon Digital Holdings, Inc.’s core capability of controlling and monetizing energy-backed infrastructure. Together, they expand our addressable market across two large and growing segments of the AI infrastructure opportunity. Finally, Bitcoin mining is the operational foundation we are building from. Our strategy is to co-locate new infrastructure with our existing mining operations. This allows us to monetize power assets immediately while building on the operational discipline and infrastructure expertise that mining demands. Mining generates revenue today. It preserves the option to redirect capacity toward AI and critical IT loads as those opportunities mature on the same sites.

That flexibility is deliberate. It is not incidental to our strategy. It is central to it, in that it allows us to best monetize our power and compute. We continue to believe Bitcoin is supported by institutional demand. In our view, that creates a constructive setup over time, with a bias to the upside if institutional buying continues and retail demand returns. We continue to believe Bitcoin will appreciate beyond its current level. We also took deliberate steps to strengthen the balance sheet during the quarter. We retired about 30% of our outstanding convertible debt at a discount, reducing potential dilution and increasing our financial flexibility.

This was a decision to reduce the capital structure’s drag on equity value and give us greater capacity to pursue the highest-return opportunities across the business, with discipline and without being forced to dilute shareholders. With that, I will turn the call over to Salman H. Khan to walk through the financial results.

Salman H. Khan: Thank you, Frederick. Good afternoon, everyone. Before I walk through the quarterly results, I want to briefly frame Q1 2026 from a strategic and financial perspective. This was a quarter in which we strengthened the balance sheet, reduced potential dilution from convertible notes by as much as approximately 46 million shares, or 9% on a fully diluted basis, and continued to align our capital allocation with the strategy. As Frederick outlined, we are converting Marathon Digital Holdings, Inc.’s digital infrastructure with lower-cost, large-scale energy capacity into AI and critical IT. Two initiatives are central to that strategy.

First, our recent announcement to acquire Long Ridge adds one of the most efficient energy-backed compute campuses with existing cash flows, owned generation, existing interconnection, low-cost, vertically integrated power generation complex, and a significant development opportunity over time. This acquisition is next to our existing Bitcoin mining site and is expected to expand our AI footprint in an AI-rich corridor. As we pursue the regulatory approvals and seek consents from Long Ridge debt holders, we believe Long Ridge will provide near-term diversified financial performance while unlocking significant long-term contracted digital infrastructure revenue. Second, the Starwood joint venture gives us a capital-efficient path to monetize the value of our sites by converting them to AI, HPC, and critical IT workloads.

It is important to note that in our joint venture structure with Starwood, Marathon Digital Holdings, Inc. contributes a site into the joint venture once a tenant is signed, for which we receive credit based on the site’s power, land, interconnection, and development attributes at predetermined value, as Frederick mentioned earlier. That is the power of the joint venture model. It allows us to convert the embedded value of our existing infrastructure into meaningful ownership in large-scale digital infrastructure opportunities while significantly limiting the incremental capital required from our balance sheet, giving us a higher return on capital than our peers. Now let me turn to Bitcoin price in Q1.

This was a challenging quarter for the Bitcoin price and reflected broader pressure across risk assets. The decline was driven by a combination of macro uncertainty, tighter risk appetite, and continued pressure on mining economics. For Marathon Digital Holdings, Inc., that backdrop reinforces the importance of operating discipline. We remain focused on fleet efficiency, cost control, and capital allocation rather than pursuing growth for growth’s sake. Since quarter-end, Bitcoin has rebounded meaningfully, increasing approximately 20% from its March 31 closing price. While volatility remains inherent to this asset class, the recovery reinforces the value of maintaining Bitcoin as both a reserve asset and a source of strategic financial flexibility.

With that context, I will turn to our Q1 2026 financial performance, capital allocation, and balance sheet activity. Revenues in Q1 2026 were $174.6 million compared to $213.9 million in the prior-year period. The decline was primarily driven by an 18% decrease in Bitcoin’s average price, which reduced revenue by $33.1 million, and to a lower extent, lower production, which accounted for approximately $2.5 million. In addition, other revenues declined approximately $3.7 million, primarily reflecting lower revenue from other digital asset hosting services compared to the prior-year period. During the quarter, we delivered a record energized hash rate of 72.2 exahash per second, increasing 33% from 54.3 exahash per second in 2025.

This growth reflects continued fleet optimization and the deployment of approximately 2.4 exahash of new-generation ASIC miners at favorable pricing during the quarter. Our share of available mining rewards reached 5.5%, up from 4.8% in 2025. We mined 2,247 Bitcoin, or 25 Bitcoin per day in Q1 2026. That is approximately 39 fewer BTC than the prior-year period, reflecting a higher network difficulty level partially offset by our higher hash rate. We reported a net loss of $1.3 billion, or [inaudible] loss per diluted share this quarter, compared to a net loss of $533.4 million, or $1.55 loss per diluted share in 2025.

Approximately $1.0 billion of this net loss for 2026 was driven by the unrealized mark-to-market fair value adjustment for digital assets, a direct reflection of the drop in Bitcoin price during the quarter. A reminder that based on our current Bitcoin holdings, every $10,000 change in Bitcoin price results in an approximate $350 million impact on fair value of digital assets, which is an unrealized mark-to-market adjustment to our income statement. Adjusted EBITDA for the quarter was negative $1.0 billion compared to negative $483.6 million in the prior-year period. Similar to net loss, this figure is dominated by the Bitcoin mark-to-market change.

We use adjusted EBITDA as a supplemental measure of operational performance; a full reconciliation to net loss is included in our shareholder letter and earnings deck. On the cost side, our cost per kilowatt-hour was $0.04 for our owned sites in Q1 2026. For context, we believe this remains among the most competitive in the sector at larger scale. Our purchased energy cost for Bitcoin for the quarter for our own mining sites was [inaudible] in 2026, from [inaudible] in 2025, primarily due to higher network difficulty driven by growth in global hash rate. This resulted in an 8% decline in Bitcoin production at our own mining sites compared to the prior-year period.

Our daily cost per petahash per day improved 3% year-over-year to $27.6 from $28.5 in 2025, and over the past eleven quarters has improved by 42%. We believe this remains among the lowest at scale in our sector. In Q1 2026, general and administrative expense, excluding stock-based compensation, was $57.7 million compared to $36.9 million in the prior-year period. The increase reflects the scaling of our operations, higher personnel costs associated with headcount growth from the prior-year period, and administrative fees in support of our expanded global footprint through acquisition and integration costs. Acquisition and integration costs burdened our G&A by $11.0 million for Q1 2026.

As part of our strategic shift toward AI and critical IT, we have realigned our business operations and reduced workforce by 15%, providing combined annualized savings of $12.0 million. This was a difficult but strategic decision. In addition, we incurred a restructuring charge of $45.9 million due to elimination of certain business initiatives and realignment. The organization focused on scaling Bitcoin mining is different from the one required to build a digital infrastructure company. This realignment positions the company to pursue AI opportunities as Frederick discussed earlier. Following this restructuring, we expect our quarterly G&A run rate, excluding stock-based compensation and acquisition and integration costs, to trend below the Q1 level as these savings are realized over time.

Now let me address deleveraging our balance sheet and our recent Bitcoin sales. During the quarter, we retired approximately 33% of our outstanding debt, which included a 30% reduction in convertible notes at a discount. This reduced potential future dilution, lowered leverage, and improved our ability to allocate capital towards higher-return strategic opportunities. We funded a portion of this debt reduction through Bitcoin monetization. Bitcoin is not only a reserve asset on our balance sheet; it is also a source of strategic financial flexibility. We will continue to deploy it thoughtfully when doing so creates measurable value for shareholders, and we intend to use it selectively to strengthen the balance sheet and fund strategic priorities.

During the quarter, we sold approximately $1.5 billion of Bitcoin. These funds were used to repurchase, at a discount, over $1.0 billion of face value of our 2030 and 2031 notes, and to reduce our line of credit by $200 million. In addition, we refinanced $150 million of our line of credit at a 7% interest rate versus 10.5% previously. I also want to highlight that we have not used our At-The-Market Equity Offering Program, or ATM, since the end of 2025. We have funded operations and balance sheet actions through Bitcoin monetization, not equity dilution. We think this is an important data point for shareholders as we continue to allocate capital toward the highest-return opportunities.

Now let me discuss our Bitcoin holdings. We held a total of 35,303 Bitcoin at the end of the quarter, a decrease of 12,228 from the previous year. Of the total, approximately 28% of the holdings were activated and loaned or pledged as collateral. The loaned Bitcoin generated approximately $66.4 million of interest income over 2026. Finally, I want to provide additional clarity on the pro forma capital structure we expect to have in place at Long Ridge upon closing the acquisition. Long Ridge’s $400 million term loan is expected to be repaid at closing.

We are also currently conducting a consent solicitation to waive the change-of-control provision in Long Ridge’s $600 million secured notes, which would allow the notes to remain in place. The $115 million CanAm facility is similarly expected to remain in place. As a result, total pro forma debt at Long Ridge is expected to be approximately $900 million, down from $1.1 billion previously, with approximately $185 million of tack-on secured notes expected to be issued. We expect to fund the remaining consideration through a combination of cash on hand, borrowings collateralized by Bitcoin, and potentially proceeds from the sale of Bitcoin, depending on market conditions at the time of closing.

We have also secured a $785 million commitment letter, backstopped by a bridge loan from Barclays in case needed. We have a plan in place to finance this acquisition, and we are very excited about what Long Ridge will bring to Marathon Digital Holdings, Inc. and our stockholders. With that, I will turn it back to Frederick. Thank you so much.

Frederick G. Thiel: The actions we have taken so far this year were purposeful, and they were interconnected. The Starwood joint venture creates a capital-efficient path to convert our power portfolio into AI infrastructure ownership. Long Ridge adds a differentiated power-advantage platform for a premier AI and critical IT campus anchored by our existing Hannibal operations. Excion gives us a second pathway into AI, sovereign, and private cloud, domestically and internationally. Balance sheet actions reduce dilution risk and increase our financial flexibility. And Bitcoin mining remains our foundation. We recognize that the market is focused on demonstrated execution—signed contracts, contracted megawatts, and tangible proof that this strategy converts into shareholder value.

Marathon Digital Holdings, Inc. is redefining itself as a digital infrastructure company, controlling and monetizing electrons to their best value across multiple compute markets. This transition is already underway; Q1 2026 was a meaningful step forward. With that, I will turn the call over to the operator to open it up for questions.

Operator: Thank you. To ask a question, press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We will pause for a moment while we poll for questions. Your first question comes from Paul Golding with Macquarie Capital. Please state your question.

Paul Golding: Congrats on all the progress this quarter. I wanted to ask, as you think high level—and maybe this is for Frederick—as you think high level about the approach to expanding on the HPC strategy, on the one hand, you have got multiple tenant prospects across the portfolio of existing sites and through the Starwood JV. On the other hand, you also did an opportunistic deal to acquire the Long Ridge asset. How should we think about your broader strategy between commercializing existing sites and adding capacity through these opportunistic deals?

Was Long Ridge sort of a one-off because of the relationship and it coming to market, or is this potentially a simultaneous approach that we should see unfold between assets coming to market that you would look to acquire versus the existing portfolio? Thanks so much.

Frederick G. Thiel: Yeah, great question. So, the Long Ridge deal has been in the works for quite a long time, since we acquired the Hannibal asset originally, actually. The site—obviously, Long Ridge provides us with the land that we need to be able to build a true premier campus. And the original intention with the Hannibal site was to build a much bigger data center facility. It just took a long while for the respective parties to reach agreement on a deal here, and obviously they had to take it to market through a process to ensure that they were doing the right thing for their shareholders.

But it has been a deal that has been in the works for quite a long time, actually. I think going forward, what you should see is you can think of us as focusing on a combination of small sites—perfect tuck-ins. We recently added a smaller site earlier at the end of last year, for example, which is now operational; it was a mining site, which has the opportunity to potentially convert into a smaller token factory facility if we want to do that with that site. At the same time, we are going to continue to look for larger land-and-power opportunities where we can build significant campuses together with Starwood.

We really have the best of both worlds here because, on the large-scale opportunities, having Starwood as a partner does a wonderful job of de-risking the whole process and ensuring that we are able to execute properly. At the same time, at the smaller-scale sites—where we know how to develop smaller sites—especially as you start looking in the world of inference where a lot of this is moving to ASIC technologies away from NVIDIA’s traditional GPUs, those facilities now are able to operate in more modular data center formats, which are more akin to what we have been doing all along with Bitcoin mining, where all our sites operate as modular data centers.

And so we believe building this dual capability, if you would, of being able to develop smaller sites that specifically service inference needs for a variety of potential tenants or end customers, as well as doing the larger sites with Starwood, is a way that we will be able to build a portfolio of assets that will provide long-term value to our shareholders.

Paul Golding: Thanks so much, Frederick. And maybe just as a quick follow-up, I was wondering if I could pull on that inference versus training thread a bit. Are you able to share any detail around the general mix of interest right now from these prospects? Is it indexing more towards the inferencing use cases, or is it more towards training, or equally distributed? Thanks so much.

Frederick G. Thiel: Sure. So, when you generically use the word hyperscaler, you are typically talking about somebody who has large amounts of data that they have collected that they train a model on, that they then use that model to do things. Amazon, Google, Microsoft use data they have to essentially do inference—train a model and then do inference on that model. So you have a lot of those sites that are a combination of training and inference. And if you have been following what Jensen and NVIDIA have been talking about, his belief is that these training sites will, over time, do more and more inference.

I think the models going forward—you are going to see a need for sites where people can deploy models that they have done in-house and run them. These are these token factory–type sites, which I think we are going to see a lot more of, where essentially somebody needs the ability to run a handful of megawatts of model scale. We are starting to see already financial players—meaning non–data center players—wanting to now have data center capacity that they can use. It could be financial trading. It could be healthcare data. It could be other things.

Where the ability to develop models and run your business using these models has become mission critical, and therefore you do not want to put it up in the cloud. You want to do it in your own private cloud. And so this is where Excion marries to this model very attractively. We are able to engage with tenants across whether they want a traditional large hyperscaler site, which is training and inference together typically, or somebody who just wants proprietary air-gapped capacity for either training and/or inference—typically together—or just inference and just wants essentially a token factory. They want to run a Qwen model. They want to run an open-weight model.

And they are literally just looking for this mix of lowest cost per token with best quality of service. And so, an example: if you are a financial trading company, you may do model development at a data center where latency is not important because you are really training a model. But once you deploy that model to actually run it, you are going to run it somewhere on or near prem where latency is next to zero. So that is a quality of service. You are willing to pay more per token if the quality of service suits exactly your needs.

And if quality of service—meaning latency, speed, and connection time—is not important, then you can run it at a token factory that is more remote. So we believe the market is going to consist of a variety of those tiers, and we are already talking with enterprise customers as part of our market research. What we are finding is there are companies whose public cloud bills, if you would—their invoices—have gone from hundreds of thousands of dollars a month to millions of dollars a month because of the fact they are running models in the public cloud, and they are finding it is just financially not an option.

You are also seeing, however, the large model providers needing more and more capacity to run their models. And as they develop more and more tools—and I will use as an example, Anthropic has just released these new tools for financial analysts, for investment banks. They are doing all of these vertically designed agentic frameworks. These are systems that consume huge amounts of tokens. But they still are running essentially on your data, but it is still cloud that is running in the background. So there is a need to be able to run across a huge infrastructure of sites globally to be able to operate these things.

And so I think you are going to see inference growing, but training is going to be growing for the foreseeable six, seven years, I think. But you are going to see inference volumes increase dramatically as more and more agentic technology comes to play. We are seeing thousand-fold increases in agentic token consumption when somebody moves from chat to using a coworker or code-copilot, for example. Just talk to any CIO and ask what their token bills are lately, and they will share with you that token maxing is not something they want to really incentivize people to do.

Paul Golding: Really appreciate all that context. Thanks so much.

Operator: Your next question comes from Christopher Charles Brendler with Rosenblatt Securities.

Christopher Charles Brendler: Hi, thanks, and good afternoon, folks. I wanted to ask on the G&A line. It has seen a pretty significant increase over the last couple of quarters. Even if you back out stock-based comp and call out acquisition expenses, I am just trying to reconcile that versus the headcount reductions. I know those are probably more forward-looking, but can you talk a little bit about some of the investments you have made and in what areas? And I was struck by your comments about sort of repositioning the organization. As you outsource more and more to Starwood, I would think the organization may not be as large in the future as more and more Bitcoin mining folks are repositioned.

Just can you talk about the path of expenses because it seems like it is a little elevated still in my mind.

Frederick G. Thiel: Salman, you want to do that?

Salman H. Khan: Sure, Chris. Thank you for the question. As you know, we have said this before: we have been growing over the years, and as part of our announcement in Q1, we looked at our organization and reorganized ourselves more focused on what is in the pipeline in the future. As we discussed in today’s call, we have the Long Ridge acquisition; we have Starwood, which we are very excited about. What you have to remember is what we are still very good at. Marathon Digital Holdings, Inc. is extremely good at securing low-cost power at scale—$0.04 per kilowatt-hour—at roughly 2 gigawatts capacity. Not many people can claim that they have that amount of power.

So we have the operations to manage that from a Bitcoin mining perspective today. And that capacity that we have and the additional capacity that we plan to acquire gets dropped into our joint venture in certain cases, for example with Starwood, because we maximize our return on that by not having to invest incremental dollars, as we get credit for the assets that we drop into the partnership. So our dilution compared to other miners is much lower. I am just going back to the structure—long-winded answer. Marathon Digital Holdings, Inc. historically was a pure-play Bitcoin miner. We were growing, and we had certain technology initiatives.

Marathon Digital Holdings, Inc. going forward continues to remain a technology company that happens to be surrounded by energy, in the middle of AI and critical IT where we expect to monetize and generate free cash flow from a long-term perspective. So we looked at the overall structure and asked: what are the skills that we are missing that we need to add to get there, and what are the skills that we do not need for the growth of our previous peer-to-peer Bitcoin mining business? That is what resulted in the realignment.

Now, in terms of the cost structure, I would expect, as we have stated in our prepared remarks, G&A to be lower than what we incurred in Q1 as we move forward. But you also have to realize that when we are having these transformative transactions and acquisitions, there are costs associated with those. And as we have disclosed in our adjusted EBITDA disclosures, we will continue to disclose those and isolate those costs so that we can see what are the recurring costs and what are nonrecurring. That way, it helps model the cost structure better.

Frederick G. Thiel: And then, Chris, the other thing is, obviously, the transition takes time in the sense that if I sign a lease tomorrow, that site is still mining Bitcoin for another 18 months maybe while the site is being built. So it is not just that we are going to let go of a whole bunch of operations folks just because we are transitioning the strategy. It takes time.

Christopher Charles Brendler: Okay. My follow-up question was on the funding plan. A lot of former crypto miners have started shying away from the ATM. You mentioned you have not used the ATM since September. As you think about your deals, I know you have a lot of cash and Bitcoin on the balance sheet for Long Ridge, but are you striving to be more of an investment-grade credit and use more traditional financing methods in 2026, or is that more of a longer-term plan? Thanks.

Salman H. Khan: Yeah, so a couple of things to think about, Chris. The transactions that we are talking about—and you can look at the examples of what other miners have disclosed with HPC conversions—we expect to, as we have stated previously, have a few announcements around the tenant in the second half of this year. Usually these transactions are either with an investment-grade counterparty or backstopped, as others have announced. From a financing perspective, yes, those financings are considered investment grade from a project finance standpoint.

When you talk about our profile and our cash flows, our goal and intention is to enter into these via this vehicle where we continue to acquire these low-cost power sites and drop them into the partnership with limited capital needs, depending on the size of the project, and continue to have those triple-net lease revenues flowing through our P&L. As you get to have more predefined future free cash flows generating for your cash flow statements, then obviously our balance sheet position improves. Whether you want to call it investment grade or non-investment grade, you can have a better conversation around what your balance sheet looks like.

As you know, historically the sector has not been evaluated much or paid attention to when it comes to credit rating agencies. But with roughly 2 gigawatts of capacity and so many opportunities to generate free cash flow from a long-term perspective—15-year, low-risk rate-of-return–type projects—it certainly begs attention from a rating perspective.

Christopher Charles Brendler: Okay. Thanks so much for the color.

Salman H. Khan: Yeah.

Operator: Next question comes from Brett Knoblauch with Cantor Fitzgerald. Please state your question.

Brett Knoblauch: Hi, guys. Thanks for taking my question. Frederick, on the Long Ridge acquisition, I want to make a path to get that maybe 600-megawatt AI campus. Could you maybe help put a time frame around that? Where are they in terms of that extra 200-megawatt grid connect that they are pursuing now? And then how long would it take to expand the generation capacity? What approvals would you need?

Frederick G. Thiel: Sure. So the behind-the-meter expansion is already in process. That is on a shorter time frame than the grid expansion. And the grid expansion application submission process—it is what it is. But we figure that as you look at the development time frame, a 200-megawatt facility will likely take 18 to 24 months before it comes online. By that time, an additional 200 megawatts behind the meter should be available. And shortly thereafter, we expect the remaining 200 megawatts to come online from the grid interconnection. So the key is getting the first site up and running for the tenant, and then having the power in the queue and ready to go.

But the behind-the-meter additional capacity is what would come on soonest of the two additional capacity increases.

Brett Knoblauch: Awesome. Helpful. And then maybe just as a follow-up, I think you guys reiterated you expect the first lease with Starwood to get signed at some point this year. What is giving you the confidence that this could be executed as quickly as you are expecting?

Frederick G. Thiel: Competition amongst the prospective tenants to get into the site. We have, as I think we said in our prepared remarks, multiple tenants looking across multiple sites that make up 90% of our capacity today. And as this market—the demand in this market—is not decreasing, people are getting ever more antsy about getting more capacity. You can just see what some of the model players have been doing just to garner more capacity out there. As a model provider, you are directly limited in your ability to grow by the amount of compute you have, because you can only have so many clients hitting your model before your compute runs out of gas.

And then the only thing that you can do is yield management and raise your prices. If you look at what some of the model providers have been doing recently, they have essentially gone from an “all-in” $200 a month offering to having to put a capacity cap on that, and you have to pay higher fees, because I do not think anybody fully expected the explosion in demand for tokens that has happened once agentic technology started to be introduced. Open-source and proprietary agent frameworks opened the floodgates for people to start really looking at how to do this. And this is not just an enterprise play, and it is not just a consumer play.

Across the full spectrum of users, people are starting to build agents. People are starting to use tools like code copilots, for example. Google is about to release its agentic helper in the Google ecosystem, which is a huge part of the SMB market with Gmail, Google Calendar, etc. That is an agent that will do what local code copilots do, but do it in the cloud. That is just going to drive more and more demand. As you add customers, you need to do more inference. At the same time, your model sizes are growing. Look at what Anthropic has said about its next generation models; they need orders of magnitude more compute than the prior model.

When you look at that increment in both model size and compute requirement for both training and operating, plus the inference side of it, there is a huge demand for capacity today. We have multiple prospective tenants vying for the opportunity to get into some of the sites. We are excited about that, and we are happy to be in the position we are with the amount of capacity that we have with a partner like Starwood, where we are able to take advantage of that.

Brett Knoblauch: Awesome. Thanks, Frederick. Appreciate it.

Operator: Your next question comes from Ben Summers with BTIG. Please state your question.

Ben Summers: Hey, good afternoon, and thank you for taking my question. You mentioned conversations with both hyperscalers and enterprise customers. Curious if there is any preference there from your side. Also, is there any difference in the conversations, and how do you think about the customer mix longer term as you build out the HPC business?

Frederick G. Thiel: From a per-megawatt basis, the hyperscalers are going to dominate by a large extent just because of the sheer capacity they need. A single enterprise—25 megawatts—would provide a huge amount of capacity for an enterprise customer. So I think it will be, in the near term, 90/10, and over time maybe 60/40. But that is really going to be dependent on how enterprises decide to do things. If they decide to do it on-prem private cloud, then we have the Excion solution to service that need, and we are able to go in and help them operate that. If they want private cloud in a near-prem or remote solution, we can do that as well.

But we think that the hyperscalers are going to be the first sets of tenants that we scale with. Over time, you will see the enterprise customer mix increase.

Ben Summers: Got it. Super helpful. And then, I know you mentioned scaling the Starwood partnership with new sites. Since announcing that partnership, has there been any change in how you are thinking about developing the power portfolio going forward, and has their long-tenured expertise in the power market helped you potentially scale what Marathon Digital Holdings, Inc. currently has in the power portfolio?

Frederick G. Thiel: I would say the beauty in the partnership is that we are really good at building a pipeline of sites—acquiring land and power at attractive prices and paying the right price for land and power. They are really good at finding tenants, getting sites designed and built and operational. It is a perfect complement. There is no real overlap in that regard, and that is what really makes this relationship work as well as it does. So we are very focused on continuing to fill that funnel of prospective sites such that we continue to be viewed by the prospective tenants as a reliable source of capacity going forward.

One other comment I will make is that a key difference between our model and what most of our peers are doing is they are typically starting with one reasonably sized site—250 megawatts, 300 megawatts, something like that—and then they have to sink all their attention and capital into getting that site done. Then they go to the second site, and then they go to the third. With the Starwood model, we can go out and acquire multiple sites, and then they can do their part of the deal. We can move at a much faster pace and scale much faster than if we were trying to do this all on our own.

While we may be late to the party, I think we are going to catch up quickly, and I think we are going to scale past what many of our peers are doing because of the value of this partnership.

Ben Summers: Super helpful. Thanks for taking my questions.

Salman H. Khan: Thank you.

Operator: That is all the time we have for questions today. I will hand the floor over to Robert Samuels for closing remarks.

Robert Samuels: Thanks, operator, and thank you, everyone, for joining us today. If you do have any questions that were not answered during today’s call, please feel free to contact our Investor Relations team at ir.mara.com. Thanks very much. Enjoy the rest of the day.

Operator: Thank you. Parties may disconnect.