Executive Summary / Key Takeaways

• MARA Holdings, Inc. is undergoing a profound transformation from a pure-play Bitcoin miner to a vertically integrated digital energy and infrastructure company, strategically positioning itself at the convergence of Bitcoin mining and AI inference.
• The company's core investment thesis hinges on controlling low-cost energy assets and leveraging technological differentiators to achieve superior operational efficiency and drive down the "cost per megawatt hour" across its diverse compute operations.
• Recent financial performance in Q3 2025 demonstrated significant revenue growth, driven by Bitcoin price appreciation and increased production, alongside substantial gains from its active digital asset management strategy.
• Strategic initiatives, including the acquisition of Exaion SAS and the partnership with MPLX LP , are expanding MARA's footprint in secure AI/HPC infrastructure and securing long-term access to low-cost energy, with a stated goal of 50% international revenue by 2028.
• While MARA maintains a robust Bitcoin treasury and aims for 75 EH/s by year-end, the company faces competitive pressures from both traditional miners and new entrants, as well as risks associated with Bitcoin market volatility and evolving regulatory landscapes.

The Dawn of Digital Energy: MARA's Strategic Evolution

MARA Holdings, Inc. is redefining its role in the digital economy, moving beyond its foundational identity as a Bitcoin miner to emerge as a vertically integrated digital energy and infrastructure powerhouse. This strategic pivot is rooted in the conviction that "electrons are the new oil," positioning energy as the pivotal resource for the future of both finance and intelligence. MARA's overarching strategy is to convert this raw power into digital value through Bitcoin mining and, increasingly, into intelligence and productivity via AI inference. This transformation is not merely an expansion but a fundamental re-engineering of its business model, shifting from an asset-light approach to one characterized by significant ownership and operational control over energy assets and computing infrastructure.

The company's history reflects this evolving vision. Initially focused on rapid growth through third-party hosting, MARA began a deliberate shift in 2024 by acquiring multiple operational Bitcoin mining sites, including facilities in Granbury and Garden City, Texas, and Kearney, Nebraska. This move dramatically increased its owned and operated capacity to approximately 70% by the end of 2024, granting greater control over operational efficiencies and costs. This vertical integration continued into 2025 with the acquisition of a 114-megawatt wind farm in Hansford County, Texas, aimed at monetizing underutilized renewable resources and securing low-cost power. These historical steps lay the groundwork for MARA's current strategic emphasis on energy ownership and technological innovation.

Technological Edge: Fueling Efficiency and Future Growth

MARA's competitive advantage is significantly bolstered by its differentiated technological stack and strategic investments in innovation. The company's commitment to controlling its technology is evident in several key areas.

MARA is a founding investor in Auradine, a U.S.-based ASIC manufacturer. Auradine's 3-nanometer chips are designed for superior power efficiency, allowing MARA to manufacture custom miners tailored to its specific needs and applications. This provides unique cost and performance advantages, and crucially, offers a strategic alternative to reliance on Chinese mining hardware, mitigating risks associated with potential tariffs and supply chain disruptions. MARA currently holds a little under 15% ownership in Auradine, which has also spun off AI-related businesses, further aligning with MARA's broader digital infrastructure ambitions.

In the realm of cooling technology, MARA has developed two-phase immersion cooling (2PIC). While the company recently exited near-term investment in its 2PIC product line to reallocate resources, the underlying technology continues to be a focus for future applications. Preliminary data from 2PIC deployments in Bitcoin mining operations indicated the ability to substantially overclock systems, potentially reducing CapEx by up to one-third for typical mining installations by requiring fewer physical miners for the same hash rate. MARA is also developing 2-phase liquid cold plate technology, a plug-in replacement for existing solutions, which is particularly relevant for the increasing heat densities of next-generation AI chips. This technology aims to facilitate the transition from traditional air-cooled systems to more efficient liquid cooling for AI, offering environmental benefits by not using water.

Furthermore, MARA operates its self-owned and operated mining pool, MARA Pool. This proprietary pool allows the company to capture higher revenues by retaining 100% of transaction fees and has consistently outperformed the network average in block rewards by over 10% since its launch. This technological control over its mining operations directly contributes to enhanced profitability and operational flexibility.

The "so what" for investors is clear: these technological differentiators are not merely incremental improvements but foundational elements of MARA's long-term strategy. They directly contribute to a lower "cost per megawatt hour," extend the useful life of capital-intensive mining rigs, and position MARA to effectively enter and compete in the burgeoning AI inference market. By controlling key aspects of its hardware, cooling, and mining software, MARA builds a robust competitive moat that enhances financial performance through reduced costs, improved margins, and a more resilient operational model.

Financial Performance: A Story of Growth and Strategic Shifts

MARA's financial performance in the third quarter of 2025 reflects the initial fruits of its strategic transformation and the dynamic Bitcoin market. The company reported a significant 92% year-over-year increase in revenues, reaching $252.41 million for the three months ended September 30, 2025. This surge was primarily fueled by an 88% increase in the average price of Bitcoin mined, contributing $113.3 million, alongside a $5.5 million increase from Bitcoin production. For the nine months ended September 30, 2025, revenues climbed to $704.78 million, a 59% increase from the prior year period. Net income for Q3 2025 stood at $123.13 million, a notable turnaround from a net loss of $124.79 million in Q3 2024.

Operational efficiency gains are becoming increasingly apparent. Purchased energy costs for owned facilities averaged $0.04 per kilowatt-hour (kWh) for both the three and nine months ended September 30, 2025. The purchased energy costs per Bitcoin for owned facilities were $39,235 in Q3 2025 and $36,118 for the nine-month period. Despite a 64% growth in total hashrate to 60.40 EHs as of September 30, 2025, MARA's cost per petahash per day improved by 15% year-over-year in Q3 2025, and 24% year-over-year in Q2 2025, a direct result of its growing inventory of owned and operated sites. This underscores management's assertion that their electricity cost per coin in owned mining operations is among the lowest in the sector.

However, the transition has also brought increased costs. Operating and maintenance costs for Q3 2025 rose by 181% due to higher shipping, warehouse, and labor expenses. General and administrative expenses increased by 45% as the company scaled its operations and pivoted to a vertically integrated model. Depreciation and amortization also saw a 64% increase, reflecting the deployment of additional mining rigs. The company recognized $20.90 million in restructuring costs in Q3 2025 as it reorganized technology operations and exited the 2PIC product line.

MARA's digital asset management strategy is a significant contributor to its financial health. As of September 30, 2025, MARA held 52,850 Bitcoin, with a fair value of $6 billion. Approximately one-third of these holdings were actively managed through lending (10,377 BTC), a separately managed account (1,903 BTC), or pledged as collateral (5,077 BTC). This strategy generated $9.57 million in interest income from loaned Bitcoin in Q3 2025 and contributed to a $108.90 million gain on digital assets - receivables, net, in the same period. The overall rise in Bitcoin price led to a $204.20 million increase in gain on digital assets in Q3 2025.

Liquidity remains robust, with $826.40 million in cash and cash equivalents and $6 billion in Bitcoin holdings as of September 30, 2025.

The company issued $1 billion in 0% Convertible Senior Notes due 2032 in the nine months ended September 30, 2025, bolstering its balance sheet flexibility. MARA plans to fund operations and investments primarily from cash, cash equivalents, and financing activities, with a revised strategy to sell a portion of produced Bitcoin to cover operational costs, aiming to limit reliance on its $1.50 billion At-the-Market (ATM) equity program to mitigate shareholder dilution.

Competitive Landscape and Strategic Positioning

MARA operates in a highly competitive and rapidly evolving landscape, facing both direct and indirect rivals. Its primary direct competitors include other publicly traded Bitcoin miners such as Riot Blockchain (RIOT), Hut 8 Mining (HUT), CleanSpark (CLSK), and Bitfarms (BITF).

Many peers, like RIOT, focus on aggressive expansion of mining capacity and energy-efficient technologies. However, MARA distinguishes itself by pursuing a broader digital energy and infrastructure vision, rather than a pure-play mining or hyperscaler colocation model. While some competitors are pivoting towards High-Performance Computing (HPC) by building large data centers for hyperscalers, MARA believes this segment will become highly commoditized and capital-intensive, with margins compressing over time. Fred Thiel emphasized that "the real profit in AI is going to come from inference," which requires smaller, modular, low-latency sites near customers, a niche MARA is actively targeting.

MARA's vertical integration strategy, particularly its focus on owning energy assets, provides a significant competitive edge. Unlike many grid-attached miners who pay an average of $0.045 to $0.05 per kilowatt-hour, MARA's owned energy assets (like the Texas wind farm and future MPLX sites) can reduce energy costs to as low as $0.01 per kilowatt-hour for operations and $10 per megawatt hour for all-in operating costs, compared to $50-$55 for traditional mining. This cost advantage allows MARA to extend the useful life of its mining rigs, deploying older, depreciated machines at low-cost intermittent sites (the "AARP fleet"), which is expected to yield significantly higher IRRs (30-40%) than traditional models. This contrasts with competitors who must frequently replace their fleets to remain competitive on grid-attached power.

The company's technological differentiators, such as its investment in Auradine for power-efficient ASICs and its development of 2-phase liquid cold plate technology for AI, further set it apart. These innovations aim to reduce CapEx, improve efficiency, and provide supply chain resilience, especially against the backdrop of potential tariffs on Chinese-manufactured goods. MARA's self-owned MARA Pool also gives it an advantage by retaining 100% of transaction fees and outperforming network averages.

In the international arena, MARA''s strategy of partnering directly with sovereign entities and energy companies (exemplified by its UAE joint venture and the Exaion acquisition) contrasts with competitors who often enter markets as mere customers. This approach allows MARA to access large-scale, low-cost energy, balance grids, and develop sovereign compute infrastructure, particularly in regions like Europe and the Middle East where data sovereignty is a critical concern. This top-down engagement provides a more stable and scalable growth path.

While MARA has successfully grown to be one of the largest public Bitcoin miners, management acknowledges that "capital efficiency almost starts becoming more important than scale." The company's focus is shifting towards being the "most efficient operator" with "near-zero cost energy," a strategy designed to ensure long-term profitability in an increasingly competitive market.

Outlook and Forward-Looking Insights

MARA's outlook is anchored in its continued transformation into a digital energy and infrastructure leader, with clear strategic initiatives driving future growth and profitability. The company is on track to reach an energized hashrate of 75 EH/s by the end of 2025, with all necessary miners secured and funded, except for $150 million expected in the second half of the year. This target represents over 40% growth from 2024.

A significant part of the forward-looking strategy is the expansion into AI and High-Performance Compute (HPC) infrastructure. MARA intends to deploy an initial set of pilots totaling 30 megawatts of inference AI compute using its liquid cooling technology this year, both at its own sites and with partners. The pending acquisition of a 64% stake in Exaion SAS for approximately $168 million, with an option to increase to 75% by 2027, is a cornerstone of this expansion. Exaion's expertise in secure cloud and AI infrastructure, operating Tier 3 and Tier 4 data centers in France and Canada, will position MARA as a credible partner for enterprises seeking secure, localized inference capacity.

The recently announced letter of intent with MPLX LP (MPLX) is another critical development, promising long-term access to lower-cost natural gas and scalable power capacity in West Texas. This collaboration is expected to provide an initial 400 megawatts of capacity, with an option to expand to 1.5 gigawatts across three plant sites. This initiative will enable MARA to develop and operate on-site power generation and compute infrastructure, offering flexibility for hybrid AI and Bitcoin mining sites and driving towards the goal of "near zero cost of energy."

Geographically, MARA aims for 50% of its revenue to come from international operations by 2028, leveraging its successful model of partnering with governments and energy companies in regions like Europe and the Middle East. This global expansion is expected to provide access to large-scale, low-cost energy opportunities.

Financially, management expects costs to decline as savings are realized from owning its own sites and generating its own power. The digital asset management strategy will continue to generate incremental income from its Bitcoin holdings, with a revised approach to opportunistically sell a portion of mined Bitcoin to fund operational costs, balancing long-term appreciation with near-term liquidity needs.

Risks and Challenges

Despite its ambitious strategy, MARA faces several pertinent risks. The volatility of Bitcoin prices remains a primary concern. While Bitcoin has shown resilience, Fred Thiel noted a "frothiness" in the market, with potential for downward pressure if buying demand subsides, especially given the rise of "Bitcoin treasury companies" which he likened to "new ICOs" that could face challenges during market declines. Bitcoin's correlation with equity markets and inverse relationship with the dollar also exposes MARA to broader macroeconomic deterioration.

The company's Bitcoin lending arrangements and use of a separately managed account (SMA) for active management introduce risks of non-repayment, operational failures, and counterparty default, as these loans are unsecured. The potential for market losses, trading errors, or insolvency of third-party managers could lead to substantial financial losses.

Regulatory and geopolitical risks are also significant. Targeted energy or property regulations and taxes on digital asset mining could increase operating costs or force relocation. New land use laws, such as those proposed in Hood County, Texas, could impose additional restrictions and taxes. Internationally, while partnerships with sovereigns offer opportunities, they also carry geopolitical complexities. The potential for tariffs on Chinese-manufactured goods could impact the cost of mining hardware, although MARA's investment in Auradine provides some mitigation.

Finally, liquidity risks could arise from events that materially diminish access to capital markets or the value of Bitcoin holdings and production capabilities. These include failure to execute growth strategies, significant increases in electricity costs not offset by Bitcoin price appreciation, and broader macroeconomic instability.

Conclusion

MARA Holdings, Inc. is executing a bold and transformative strategy to evolve into a vertically integrated digital energy and infrastructure company. By deeply embedding itself in the energy value chain, from generation to high-intensity compute, MARA is building a resilient business model designed to thrive in the converging worlds of Bitcoin and AI. Its technological differentiators, including proprietary ASICs and advanced cooling solutions, coupled with a disciplined approach to capital allocation and active digital asset management, position it uniquely against a competitive landscape often characterized by more singular focuses.

The company's strategic initiatives, particularly the Exaion acquisition and the MPLX partnership, are concrete steps towards achieving its vision of low-cost, scalable, and diversified compute infrastructure for both Bitcoin mining and AI inference. While significant risks remain, especially market volatility and regulatory uncertainties, MARA's clear narrative, operational achievements, and forward-looking guidance, including the 75 EH/s target and international expansion goals, underscore a compelling investment thesis. Investors should closely monitor MARA's progress in realizing its "profit per megawatt hour" objective and the successful integration of its new AI and energy assets, as these will be critical indicators of its ability to unlock long-term value and solidify its leadership in the digital energy nexus.