MARA Holdings, Inc.

Good day, ladies and gentlemen. Welcome to tomorrow's second quarter 2024 earnings webcast and conference call. I would now like to turn the call over to your host, Robert Samuels, Vice President of Investor Relations. Please go ahead.

Thank you, Daryl. Good afternoon and welcome to tomorrow's second quarter 2024 earnings call. Thank you for joining us today. With me on today's call are our Chairman and Chief Executive Officer, Fred Thiel, and our Chief Financial Officer, Salman Khan. Certain statements made during this call may be considered forward-looking statements within the meaning of the federal securities laws. In particular, any statements about our future growth plans and performance, our liquidity position, our growth opportunities, and our future financial performance are forward-looking statements. These statements are often identified by the use of words such as anticipate, believe, estimate, intend, design, may, plan, project, would, and similar expressions or variations. Investors are cautioned not to place undue reliance on these forward-looking statements. All forward-looking statements made on today's call involve risks and uncertainties. While we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so, except to the extent required by applicable law. Our actual results and outcomes may differ materially from those included in these forward-looking statements as a result of various factors, including but not limited to the factors discussed under the heading risk factors in our most recent annual report on Form 10-K and any other periodic reports that we may file with the SEC. Finally, please note that on today's call, we will refer to certain financial measures that were not prepared in accordance with the generally accepted accounting principles in the United States, including adjusted EBITDA and non-GAAP total margin. Mara believes these non-GAAP financial measures are important indicators of its operating performance because they exclude certain items that we do not believe directly reflect our core operations and may not be indicative of our recurring operations. Please refer to the earnings release for a full reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures. As usual, we'll begin today's call with prepared remarks from Fred and Salman. After their comments, we will go through some of the more popular questions from investors before transferring to a live Q&A with our covering analysts. And with that on the way, I'm going to return the call over to Fred to kick things off. Fred?

Thank you, Rob, and thank you, everybody, for joining us. Today I'm going to discuss our second quarter results and provide some insights into our newly launched business teams. In Q2, we celebrated several key achievements that highlight our innovative and strategic initiatives. We completed the successful acquisition and closing of our Garden City Data Center in Texas, increased our 2024 hash rate target, to 50 exahash, signed a significant partnership with the government of Kenya aimed at developing underutilized energy assets, and to fund further development of the electrical grid and boost local economic growth. We began to diversify our revenues through the successful launch of Mara's Caspa mining operations, launched a pilot heating project in Finland leveraging digital asset compute to offer an efficient and low-cost alternative to district heating by converting clean energy into heat directly onsite while reducing carbon emissions for the district by avoidance of wood pallet and biomass burning source of energy. Continued to increase capacity, reaching an all-time installed hash rate of 31.5 exahash through the deployment of 15,000 new miners with energy efficiency of 17 joules per terahash. Organized MARA into strategic business teams with the focus on pushing responsibility and authority as far down in the organization as possible for diversification and growth. These accomplishments demonstrate our dedication to innovation, sustainable growth, and a long-term vision that leverages digital asset compute to transform the energy industry and enable a speedier energy transformation. As I discussed during our last call, we are beginning to lay the foundation for Mara to become a globally diversified company that leverages digital asset compute to build a more sustainable and inclusive future. During the second quarter, we recognized, sorry, we reorganized The internal structure of the business to better align our growth opportunities, sharpen our strategic focus, bolster accountability, and accelerate our speed and agility as we scale. MARA is now a streamlined organization consisting of three specialized business teams, utility scale mining, energy harvesting, and technology, as well as support organizations. Beginning this quarter, I'm going to organize my remarks around these specialties. Let's begin with utility-scale mining, the specialty that Mara is primarily known for today. Large-scale digital asset compute focused on providing grid stability at scale and enhancing the viability of renewable energy projects in support of the energy transition. During the second quarter, our Bitcoin production was impacted by unexpected equipment failures and transmission line maintenance at the Ellendale site operated by Applied Digital. Increased global hash rate and resulting network difficulty in the April halving event. That said, transformer issues in Ellendale were mitigated and remediated post-quarter end, and our hash rate recovery effort is complete. Furthermore, we grew our operational fleet by over 10% to approximately 250,000 miners and reached an overall operational hash rate of 30 exahash. Our current fleet efficiency stands at 23.5 joules per terahash, and we expect this will improve through the remainder of the year as we deploy additional S21 pros and immersion coolers. Turning to our newly acquired sites, in Garden City, Texas, since taking over the site, we improved our hash rate by 25% and completed airflow enhancements and electrical upgrades. In Kearney, Nebraska, hash rate improved by almost 15% due to container upgrades and near completion of hosted customer exits. The site now operates almost entirely with Mara miners. Lastly, we began construction of a heat recapture agricultural site, which we will discuss further at a later date. In Granbury, when we took control from Hut 8 earlier this year, we inherited a site that was poorly maintained with flawed infrastructure that led to numerous electrical outages and low employee morale. In just a few months, our team has made significant progress fixing the infrastructure, resolving electrical outages, and making plans to enhance the sound wall. We have also seen a notable uptick in employee satisfaction. Work continues to upgrade the site with the installation of single-phase emerging containers which should make up 50% of the infrastructure by year end. We have also made good progress on transitioning hosted customers with an expectation of completing all transitions in Q3. Moving to our third-party hosted sites, we deployed software upgrades resulting in 20% increased efficiency of installed miners from 29 joules per terahash to 23 joules per terahash. By deploying software upgrades and purposely underclocking machines, we have been able to mitigate issues resulting from faulty transformers while increasing efficiency and maintaining high uptime. We currently own and operate approximately 54% of the 1.1 gigawatts of power in our diversified portfolio of digital asset compute. We will continue making owned and operated sites a greater percentage of our fleet over time and expect to see material cost savings as this occurs. Longer term, our intention is to be amongst the lower cost operators in the industry. We remain focused on delivering in our 50x a hash goal and continue to install and energize miners according to plan. As we look to diversify our portfolio of digital asset compute, we announced that MARA is mining CASPA, a proof of work digital asset. We currently mine roughly 9% of the global hash rate and once fully deployed, we expect that CASPA will consume only 1% of our energy capacity or 11 megawatts, further highlighting the benefits of diversification. Furthermore, we currently mine CASPA at 80% plus margins, which is highly accretive as those margin dollars can be used for everything from covering G&A to acquiring Bitcoin in the open market. This brings me to the recent change in our HODL strategy. We have long been advocating that Bitcoin should be a strategic treasury asset for corporations and sovereigns. In early 2021, Mara purchased $150 million of Bitcoin, which formed the basis of our current HODL. As market conditions changed in late 22, Mara began selling Bitcoin from operations to cover operating expenses. Market conditions have since improved and regulatory pressures have eased, as exemplified by the successful launch of Bitcoin ETFs and increased institutional and sovereign investments in Bitcoin. Our recent announcement was opportune, given several statements from presidential candidates and Senator Lummis signaling support for Bitcoin as a strategic reserve asset at the recent national conference. We continue to strongly advocate that corporations and sovereigns should hold Bitcoin as a strategic reserve asset, and we will make open market purchases of Bitcoin opportunistically from time to time as our in-house digital asset trading desk takes advantage of dips in the market, such as our recent purchase of 100 million in Bitcoin. Fifteen to energy harvesting. Its mission is to support the energy transformation by converting underutilized sources of energy stranded clean energy and environmentally harmful waste energy into economic value. Additionally, we can eliminate redundant expense and waste associated with generating heat, leading to energy and cost savings and a more sustainable approach to energy use. In June, we announced the launch of a two megawatt pilot project in Finland to warm a town of 11,000 residents using digital asset computing. I'm pleased to report that we've maintained over 98% uptime over the past 30 days and mined approximately 4.3 Bitcoin in June and July, all while generating valuable heat for the community at a total energy use of less than what each home would have individually required. We plan to increase our heating capacity before the winter season by an additional 1.5 megawatts to the current pilot and start a new one megawatt pilot at another location. By year-end, we expect our total capacity in Finland to reach over 4 megawatts, or an equivalent of approximately 9,000 more Finnish homes. One distinctive aspect of our energy harvesting strategy is that unlike utility-scale mining, where electricity is typically purchased from utilities at market prices, our energy harvesting projects typically benefit from subsidized power costs by utilizing recycled energy or unlocking stranded energy resources that lack grid interconnect. This approach aims to substantially reduce our cost to mine over time, which is part of our goal towards achieving zero cost energy in the future. As our energy harvesting business continues to grow, we expect to see projects that have energy generation components with longer lives than traditional Bitcoin mining sites, resulting in higher potential returns. Energy harvesting provides appealing opportunities for potential joint venture partners and infrastructure investors to collaborate with Mara and make a positive impact on the global energy landscape. Turning to our technology business, the focus is on creating advanced technologies that transform digital infrastructure and enable AI and digital asset compute data center builders and operators to benefit from best-in-class cooling and power optimization strategies. Since its launch earlier this year, Our 2PIC technology has received lots of positive attention, and we are actively working with OEMs, reseller partners, and end-user customers on evaluations and potential orders for delivery later this year. We have already begun using and deploying our own technology to improve the operations of our site. Immersion technology will increase our uptime and stability and allow us to operate without curtailing due to heat or other weather-related issues that in the past may have impacted our air-cooled sites. Over time, we expect the majority of our sites to be converted to immersion, and our new build sites will be predominantly based on immersion. Together with our firmware, immersion will also help us to overclock and underclock with greater ease and effect, as well as provide the perfect complement to balance inference AI loads. We recently introduced a version of the tank that is designed specifically to be flexible to use for either Bitcoin mining or AI. As a data center operator, this means that you can run Bitcoin mining and if or when you want to move to HPC, the infrastructure does not need to change. We are optimistic about the conversations we're having with OEMs on the AI side as they like this concept since it allows their customers to deploy infrastructure and have it ready for AI while utilizing it to mine Bitcoin in the near term. Providing infrastructure to data centers is a long-term project, and we expect to see revenues begin to scale in the next 18 to 24 months. In the mining space, we expect technology sales to grow incrementally as companies continue to build out and update their facilities with immersion technologies. As previously stated, our long-term objective is for 50% of our revenues to originate from non-utility scale mining. Achieving this goal will take time, but these new ventures are already showing progress. I'm now going to turn the call over to Salman, who will discuss our results in more detail. Salman.