On February 26, 2026, Marathon Digital (MARA) released its full-year 2025 financial results.

Full-year revenue was $907 million, up 38% year on year.

That looks solid. But the company posted a net loss of $1.311 billion, compared with a profit of $541 million a year earlier.

In one year, MARA swung from a $540 million profit to a $1.3 billion loss, a gap of nearly $1.9 billion.

As one of the listed mining companies with the largest computing power in North America, it delivered its ugliest report card since going public.

Revenue Rose, but the Money Disappeared: Where Did the $1.3 Billion Loss Come From?

Revenue jumped 38%. So how did MARA end up reporting a $1.3 billion net loss?

The crypto mining business itself has not collapsed. Its gross margin even edged up to 37.5%.

What really swallowed the profit was a $1.3 billion pile of old bills: MARA had spent aggressively on mining rigs and infrastructure in earlier years, and depreciation has now surged 80% to $770 million; volatility in the Bitcoin it holds led to more than $400 million in asset impairments; and companies it bought at high prices in the past have now triggered roughly $100 million in goodwill impairments, with the company effectively admitting it overpaid.

Most of that $1.3 billion was non-cash, but every dollar reflects the marks left by the company’s aggressive expansion over the past two years.

More painful than settling old bills is the computing power arms race now spreading across the sector.

In 2025, MARA pushed hard to raise its own computing power by 25%, but the broader network grew even faster, surging 35%. MARA ran fast, but others ran faster.

The result was that even with more machines, MARA’s full-year Bitcoin output fell 6.7%.

By the fourth quarter, daily production averaged just 21.9 Bitcoin, down 19% year on year, while the pure electricity cost to mine one Bitcoin had surged to $48,611, squeezing margins to the limit.

The ticket price is getting higher, while the slice of the pie is getting smaller.

The huge accounting loss reflects bills from the past. But the decline in mining efficiency is the problem happening right now.

Together, those two issues are what make this financial report so painful.

The HODL Faith of "Never Sell" Was Half Broken in 2025

MARA’s strongest label used to be “HODL”: it would not sell the coins it mined, but hold them firmly.

By 2025, that label had started to loosen.

The company sold Bitcoin for $434 million in cash during the year, nearly tripling the amount from the previous year.

Net purchases, meanwhile, collapsed from $1.795 billion last year to just $40 million.

The rhetoric is faith. The action is survival.

MARA did this because the company was bleeding cash badly.

In 2025, MARA burned $803 million in cash just to keep operations running. The money it earned from mining was nowhere near enough to fill the hole.

In the past, it plugged that gap with Wall Street financing. This year, financing shrank by 60%, and capital markets were no longer willing to play along.

More urgent still is the debt bomb hanging over the company.

By the end of 2025, MARA’s total notes payable, current and non-current, reached $3.25 billion, up 45% from $2.247 billion in 2024.

The largest tranche comes due in 2027: about $1.9 billion in convertible notes, whose holders have the right to demand cash repayment.

But MARA currently has only $547 million in liquid cash on its books, leaving a gap as large as 3.5 times that amount.

On the surface, the company has more than $7 billion in assets, but the bulk is tied up in Bitcoin and rapidly depreciating mining rigs.

If it is forced to dump Bitcoin to repay debt, the consequences could be severe.

Short sellers have piled in aggressively, with short interest as high as about 30% of the public float, betting that MARA will eventually have to liquidate assets at low prices.

And under this kind of life-or-death pressure, what are the executives doing?

SEC filings show that the CEO and CFO sold down shares with precision over the past half year or so, cashing out roughly more than $7 million while buying none.

More jarring, the CEO’s annual pay soared from $7.1 million in 2022 to $43.24 million in 2024, 141 times what the average employee earned.

Never listen only to what executives say into microphones. Check what their accounts are doing.

When the captain keeps shouting “long-term holding” while quietly putting on a life jacket, the giant ship called “faith” may already be hearing the sound of ice cracking.

The Last Card: From Mining Bitcoin to "Mining" AI Computing Power

MARA knows better than anyone that the pure crypto mining path is getting narrower.

So it has turned to the hottest escape route of the moment: AI.

For mining companies, pivoting to AI is a natural move. Mining farms already have power, sites and cooling systems. By “subleasing” that infrastructure to AI companies, they can shift from “mining Bitcoin” to collecting dollar-denominated rent.

To do this, MARA has set up joint ventures and acquired a French AI company. Its CEO has even sketched out a perfect “energy arbitrage” pitch: lease capacity to AI when AI is hot, and keep mining when it is not, capturing both sides.

Unfortunately, as of the latest financial report, MARA has not produced a single signed AI customer contract, and not one dollar of AI revenue has hit the books.

Wall Street is sharply divided. Some investors buy the vision and have assigned a bullish $30 price target; others focus on the current earnings hole and have cut their target to $11. The core of the disagreement is really a race against time.

If MARA can get its AI business working before the $1.9 billion debt comes due in 2027, its assets could be revalued and the company could stage a comeback. If it cannot, it will face a three-way squeeze: mining losses, no AI revenue and approaching debt maturities.

By then, MARA will have only three survival tools left: sell Bitcoin, issue more shares, or refinance old debt with new borrowing.

Each of those cuts would land hard on existing shareholders.

Overall, after reading MARA’s 2025 financial report, there is no need to rush into calling it a blowup.

After all, 99% of the seemingly frightening loss was just non-cash impairment on the books. Add in the Bitcoin it still holds, worth nearly $4.7 billion, and MARA is still far from “dead.”

But that does not mean it is safe.

Look one layer deeper and you find that operating cash flow has been negative for three straight years, while debt swelled 43% in just one year.

Worse, output from its core crypto mining business is falling, costs are rising, and the much-hyped “AI transformation” remains, for now, a PowerPoint framework rather than a working business.

For MARA, 2026 has to be the year it forces out a second business line that can truly generate cash before debt crushes it.

At its current cash-burn rate, the time window left to do that is, at most, about 18 months.