MARA Holdings, Inc.

Good day, ladies and gentlemen. Welcome to the Marathon Digital Holdings second quarter 2022 earnings webcast and conference call. At this time, all participants are in a listen-only mode. Our question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Charlie Schumacher, Vice President of Corporate Communications. Sir, please go ahead.

Thank you, Vikram. Hello, everyone, and welcome to Marathon Digital Holdings' second quarter 2022 earnings call. Joining me on today's call are our Chairman and CEO, Fred Thiel, and our CFO, Hugh Gallagher. Before we get started, I'd like to remind everyone that our prepared remarks may contain forward-looking statements. which are subject to risks and uncertainties, and that we may make additional forward-looking statements during the question and answer session. These forward-looking statements are subject to risks and uncertainties, and actual results may differ materially. When used in this call, the words anticipate, could, enable, estimate, intend, expect, believe, potential, will, should, project, and similar expressions, as they relate to Marathon Digital Holdings Inc., are, as such, a forward-looking statement. Please refer to our earnings release for a full recitation of our forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainties, which may cause actual results to differ from those anticipated by Marathon at this time. In addition, other risks are more fully described in Marathon's public filings with the U.S. Securities and Exchange Commission, which can be reviewed at www.sec.gov. Finally, please note that on today's call, we will refer to certain non-GAAP financial measures in which Marathon excludes certain expenses from its GAAP financial results. Please refer to our company's periodic reports on Form 10-K and 10-Q for a full reconciliation of its non-GAAP performance measures to the most comparable GAAP financial measures. We'll begin today's call with prepared remarks from Fred and Hugh. After their comments, we will be going through some of our more popular questions from our investors before transferring to live Q&A with our covering analysts. And with that covered, I'm going to turn it over to Fred to kick things off. Fred.

Thank you, Charlie. And thank you all for joining us today for our earnings call. The second quarter of 2022 proved to be a challenging time for our industry, the broader market and for Marathon. But as we'll discuss today, we believe our recent progress proves that Marathon is well positioned relative to its peers to grow as a leader in securing and supporting the Bitcoin ecosystem. During the quarter, Bitcoin's price declined approximately 56%. At the same time, energy prices increased, in part due to Russia's invasion of Ukraine. The combination of both factors has compressed margins and reduced profits for many in our industry. Miners who were running old equipment or overpaying for electricity have been forced to stop mining. As a result, the global hash rate has grown far slower than many analysts were projecting at the start of this year, and we have even seen the difficulty rate adjust downwards multiple times since the end of May. At Marathon, we tend to be fairly well insulated from the macro environment relative to our peers. Since we run a lean operation, we are asset light, and we do not have large capital expenditures for data centers or power assets. However, as our financial results demonstrate, we are far from immune to the impact, as we are directly tied to a new but maturing asset. In the second quarter, in addition to the challenging macro environment, We also had to work through several obstacles unique to Marathon that depressed production and negatively impacted our results this past quarter. As we've discussed in our monthly production reports, our Bitcoin production was substantially reduced during the second quarter due to downtime and maintenance issues at the power generating station in Hardin, Montana, coupled with an elongated regulatory process that delayed the energization of our installed miners in Texas. For most of the quarter, the power generating facility in Montana struggled to produce an adequate amount of electricity to supply our miners with power. And in June, it seemed that Murphy's Law came into effect when a severe storm passed through the region, damaging the power plant and taking offline all 30,000 of our miners in the area, which represented approximately 75% of our active fleet at the time. The downtime from an inconsistent supply of electricity And the storm caused our miners to produce approximately 45% less Bitcoin during the quarter than they theoretically could have if they had been running at 90% uptime, which is more in line with our long-term target. Outside of Montana, the energization of our miners in Texas was repeatedly and frustratingly postponed by the power provider until the tax exempt status of the wind farm where 68,000 of our miners are being installed could be confirmed. While confirmation was pending, we applied pressure where we could to expedite the process, and we continued to have miners installed in preparation of receiving the green light to energize. By the end of Q2, we had approximately 30,000 miners, or 3.9 exahashes, installed across these new facilities. And as of August 1st, that number increased to approximately 49,000 miners, or 4.7 exahashes. Fortunately, these delays are finally behind us, Just last week, miners at the wind farm in West Texas started to be energized. However, before discussing the immense progress we've made subsequent to the quarter's end to energize our installed miners, procure hosting for the remainder of our fleet, and bolster our financial position, I'm going to turn the call over to Hugh to discuss our second quarter financial results in detail. Hugh?