Good day, ladies and gentlemen, welcome to Marathon Digital Holdings Fourth Quarter and Fiscal Year 2023 Earnings Webcast and Conference Call. I'd now like to turn the call over to your host, Charlie Schumacher, Vice President of Corporate Communications. Please go ahead, Charlie. Thank you, Kevin. Good afternoon, and welcome to Marathon Digital Holdings fourth quarter and fiscal year 2023 earnings call. Thank you for joining us for our call today. With me on today's call are Chairman and Chief Executive Officer, Fred Thiel; and our Chief Financial Officer, Salman Khan. Before we get started, I'd like to remind everyone that our prepared remarks may contain forward-looking statements 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 are as such forward-looking statements. Please refer to our earnings release for a full reputation of our forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainties which may cause actual results to differ materially from those anticipated by Marathon at this time. Some of these risks and uncertainties are more fully described in Marathon's public filings with the US Securities and Exchange Commission, which can be viewed at www.sec.gov and ir.mara.com. Finally, please note that on today's call we will refer to certain financial measures that were not prepared in accordance with Generally Accepted Accounting Principles in the United States, including adjusted EBITDA and non-GAAP total margin. Marathon believes these non-GAAP financial measures are important indicators of its operating performance because they exclude certain items that are unrelated to and may not be indicative of its GAAP financial results. Please refer to our company's periodic reports on Form 10-K and 10-Q and to our website for a full reconciliation of these non-GAAP performance measures to the most comparable GAAP financial measures. We'll begin today's call with prepared remarks from Fred and Salman, after their comments we will be going through some of the more popular questions from our investors before transferring to a live Q&A with our covering analysts. And with that out of the way, I'm going to turn the call over to Fred to kick things off. Fred?

Thank you, Charlie. We had two primary objectives for 2023, which we outlined on our first-quarter earnings call last year. The first was to energize our previously purchased mining rigs to reach our target of 23 exahash. And the second was to optimize our performance to become more effective and more efficient. As the record operational and financial results we published today clearly demonstrate, 2023 was an immensely successful year for Marathon, in which we achieved both of our primary objectives. Today, Marathon is one of the largest Bitcoin miners in North America and whether financially, operationally or technologically, we believe we are setting the pace for this industry. In 2023, we grew our hash rate 253% from 7 exahash to 24.7 exahash, surpassing our target of 23 exahash. At the end of last calendar year, we had over 210,000 bitcoin miners operating across 11 different sites on three continents, which we believe makes us the largest and most diversified publicly traded miner today. At the same time, we became much more efficient at converting energy into economic value, which is the heart of what we do. During the year, we improved our fleet's efficiency by 21%, from 30.9 joules per terahash to 24.5 joules per terahash, which means that on top of our scale and our diversified operations, we have one of the most efficient fleets in the industry. Our operations team dedicated significant efforts to enhance the performance of our facilities. In August of 2023, our site in King Mountain only operated at an average of 51% of its operational capacity and the site in Granbury only averaged 56% of its total capacity. Our team took charge of the situation, flying in to assess and address the issues. By the end of 2023, our team had optimized both sites, such that King Mountain operated at an average of 92% of its capacity and Granbury at an average of 99% of its capacity in December. While site performance will fluctuate with seasonality and maintenance, the significant improvements we made underscore the positive impact that our team and our processes can have in our operation, a testament that we are not just effective capital allocators, but excellent operators as well. Our operational expertise is one of the many reasons we are confident that we will be able to successfully integrate and ultimately optimize the two datacenters we recently acquired from Generate Capital and any other sites we may acquire in the near or distant future. In 2023, the total bitcoin network's hash rate experienced a significant increase, doubling from 253 exahash to 509 exahash. This increase in hash rate has the equivalent impact of a halving event. With the hash rate doubling, difficulty essentially doubled, which effectively reduced the reward for mining a block by half, holding all else constant. Meanwhile, Marathon grew more than twice as fast as the rest of the network as we increased our hash rate by 253% last year. At the same time, we improved our operational efficiency, improving our fleet's efficiency by 21%. As a result, we produced a record amount of Bitcoin in 2023. We increased our Bitcoin production by 210% year-over-year from 4,144 bitcoin in 2022 to 12,852 bitcoin in 2023. Production improved throughout the year, but the fourth quarter really stood out operationally and financially. By the end of the fourth quarter of 2023, we were operating near full strength after Garden City was fully energized in October, following several months of regulatory delays. In December, we averaged 90% capacity across all sites and at the same time, we benefited from a huge surge in transaction fees on the Bitcoin network. In December 2023 alone, we produced 1,853 Bitcoin with 380 Bitcoin or 22% of our total production coming from fees. As a result, we produced a record 4,242 bitcoin in Q4. In Q4 2023 alone, we produced more bitcoin than we did in all of 2022 and more bitcoin than three of our top competitors combined. In addition to Q4's record bitcoin production, we announced several new expansions at the end of last year that are indicative of how we see Marathon evolving. The first announcement was our inaugural pilot project powered by renewable off-grid energy from a landfill in Utah. Our team is still working on finalizing the data, but the preliminary results of this project demonstrate that bitcoin miners can actually help reduce emissions. The data suggests that the model we helped pioneer, of turning trash into cash by mining bitcoin with stranded methane from landfills, is economically viable for miners as well as for the landfill operator, and is more effective at reducing methane emissions than flaring. Following the landfill gas project in Utah, we also announced our second international expansion in our first deployment into Latin America. In Paraguay, we are working to convert 27 megawatts of unused hydropower into 1.1 exahashes of Bitcoin mining capacity. By Marathon's standards, this deployment is really just a large-scale pilot and it serves as an excellent case study for the value that Bitcoin mining can bring to regions throughout the world with excess power. It also demonstrates our ability to replicate the joint venture model that we developed in Abu Dhabi, which allows us to partner with regional experts to quickly and effectively expand our diversified portfolio of Bitcoin mining assets. This experience is essential as we look to grow our footprint internationally and educate the world on the value Bitcoin mining can bring as they adopt technology solutions in the energy sector. Perhaps the most significant announcement from last quarter was our $179 million acquisition of our first fully-owned datacenters in Kearney, Nebraska, and Granbury, Texas. The acquisition closed last month and the purchase price is subject to customary closing adjustments. With this acquisition, Marathon transformed from a company with 584 megawatts of capacity, 3% of which we directly owned or operated, to one with 910 megawatts of capacity, 45% of which are sites we directly own. We've already spoken about the strategic importance of owning these sites and the accretive nature of this transaction, and of the opportunities we have to reduce our operational costs at these sites, so I'll refrain from going into detail today. We will be assuming full operational control of them by April 30th or earlier, allowing us to accelerate operational cost savings and optimization. While we're not yet the operators, our team is currently focused on engaging the local communities to ensure that we can be the best neighbors possible as we go through the transition process. We believe Bitcoin mining can positively change the world and that starts with the local communities in which we operate, where our operations create highly-skilled jobs and economic contributions for the people in those communities. Before going too far into our future plans, I'm going to turn the call over to Salman to discuss our financial results for the fourth quarter and fiscal year ended 2023. Salman?

Thank you, Fred. We had an excellent fourth quarter to cap off what was an incredibly successful year for Marathon. We produced record revenues, net income, and adjusted EBITDA. And we entered 2024 with a strong balance sheet that has us well-positioned for the upcoming halving and beyond. Now let me dig into the details. The company reported net income attributable to common stockholders of approximately $152 million or $0.62 per diluted share in the quarter, compared to a net loss of approximately $392 million or $3.13 per share in the prior year quarter. For the full year, we reported net income of $261 million or $1.06 per diluted share compared to a net loss of $694 million or $6.12 per share in the prior year. In both the quarter and the year, the improvement in profitability was partially due to us choosing to early adopt the new FASB fair value accounting rules. If the company had not early adopted the new FASB fair value accounting rules, our net income attributable to common stockholders for the fourth quarter of 2023 would have been a net loss of $5 million or a loss of $0.02 per diluted share, and net income of $33 million or $0.17 per diluted share for the year ended December 31, 2023. I will discuss these changes and their impact in more detail shortly, but first let's dive into mining results. Fourth quarter revenues were a record $157 million, significantly higher than the prior year revenues of $28 million and were driven by a 172% increase in Bitcoin production coupled with 101% higher average price of Bitcoin. For the full year, we recorded revenues of approximately $388 million, also a significant improvement compared to $118 million in the prior year. The improvement year-over-year was driven by a 210% increase in Bitcoin production and a 2% average price of Bitcoin in 2023 compared to 2022. It is important to note that in 2023, we benefited from the absence of a $333 million impairment of mining equipment and advances to vendors, a $183 million impairment of digital assets and an $85 million loss on digital assets held within the investment fund, and a $56 million impairment of deposits, loans, and investment due to vendor bankruptcy, partially offset by an $84 million gain on sale of equipment net of disposals in 2022. Our hosting and energy costs for the three months ended December 31 were $75 million compared to $30 million last year. For the year, hosting and energy costs were $223 million compared to $73 million in 2022. In both time periods, the increase was primarily due to growth in our mining fleet and related costs. Total cost of revenues, which includes depreciation and amortization, was $146 million in Q4 of 2023, compared to $44 million in Q4 of 2022, an increase of 235%. For the full year, this was $403 million, a 166% increase from $151 million in 2022. Depreciation and amortization for the fourth quarter was $71 million, increasing by $57 million compared to the same period in the prior year. For the full year, depreciation and amortization was $180 million compared to $79 million in 2022. In both periods, the change was predominantly the result of growing our energized hash rate from 7 exahash to 24.7 exahash. We have also early adopted FASB accounting for the disclosure of Crypto Assets, which actually requires the measurement of Crypto Assets at fair value. The adoption of new accounting guidance resulted in a cumulative effect adjustment at the beginning of 2023. In 2023, we increased our Bitcoin Holdings by 24% from 12,232 bitcoin to 15,126 bitcoin. Because of the significant amount of Bitcoin we hold on our balance sheet, we recognized a gain on digital assets of $214 million during the fourth quarter of 2023 and a gain on digital assets of $331 million for the full year under this new accounting guidance. As one of the largest holders of Bitcoin among publicly traded companies, we expect the new fair value accounting of Bitcoin to continue to impact our bottom line going forward as the price of Bitcoin fluctuates. The company's non-GAAP total margin, excluding depreciation and amortization, was $82 million this quarter compared to a loss of $1 million in the same quarter last year. For the fiscal year 2023, our non-GAAP total margin, excluding depreciation and amortization, was $164 million compared to $45 million in 2022. In both cases, the change was predominantly related to higher Bitcoin prices, increased production, and increased operational efficiencies. In Q4 of 2023, adjusted EBITDA improved to $260 million, versus a $374 million loss in the prior year period. For the full year, adjusted EBITDA improved to $420 million from a loss of $543 million in 2022. The drivers of the adjusted EBITDA improvement in both periods include total margin improvement, excluding depreciation and amortization, gains on digital assets, and the absence of impairment charges. Due to the impairment charges of $572 million in 2022, we had a gain of over $700 million, which had a positive impact on earnings when compared to last year. General and administrative expenses, excluding stock-based compensation, were $20.5 million in Q4 of 2023, compared to $13 million in the prior year period. For the fiscal year 2023, G&A excluding stock-based compensation was $63 million compared to $32 million in 2022. This increase in expenses was primarily due to the increase in scale of the business including payroll, benefits, professional fees, and other costs. At the end of 2023, we had approximately 60 employees, up from 30 a year ago and we continue to opportunistically add talent across the organization. Turning to our Bitcoin Holdings and cash position. Unrestricted cash and cash equivalents totaled $357 million at December 31, 2023, up $254 million compared to last year. Also at December 31, we held approximately 15,126 Bitcoin with a carrying value of $640 million on the balance sheet. The company's combined balance of unrestricted cash and cash equivalents and Bitcoin was approximately $1 billion as of December 31, 2023. We sold 2,365 Bitcoin during Q4 of 2023, realizing cash proceeds of $83 million. During the year, we sold 9,482 Bitcoin and realized cash proceeds of $264 million. These proceeds were utilized to fund operating expenses, including the cost of revenues for energy hosting and other cash operating expenses. During the year we generated $608 million from at-the-market equity sales which we primarily intend to use for growth capital and other general corporate purposes. As previously discussed, during the year we took advantage of an opportunity to strengthen our balance sheet by exchanging $417 million in convertible notes for approximately $329 million in equity. This transaction reduced our debt by 56% and saved approximately $101 million or $0.55 per share in cash for our stockholders. The combined cash and cash equivalents and Bitcoin on our balance sheet along with reduced debt and access to at-the-market facility provides us ample liquidity and optionality to strategically evaluate opportunities as we approach halving. We believe the increased value of combined cash and Bitcoin, along with reduced debt, is prudent risk management and a source of strength for the company's balance sheet as we enter a potentially turbulent time for the industry. As mentioned in our January production report, our unrestricted cash balance at January 31 was $319 million and we held approximately 15,741 Bitcoin with a fair value of $670 million. In total, we had approximately $1 billion in unrestricted cash and Bitcoin at the end of January. We continue to actively manage and optimize our treasury by hedging a portion of our Bitcoin Holdings. The purpose is to mitigate the impacts of extreme volatility in the near term, while maintaining the long-term strategy of maximizing the size and value of our treasury. Given Bitcoin's historical volatility, we believe this strategy is integral to improving the resilience of our organization, providing downside risk protection during volatile market conditions and maximizing our Bitcoin valuation potential. We expect our Bitcoin Holdings will generally increase but fluctuate depending on operating and market conditions. And again, due to the significant amount of Bitcoin we hold on our balance sheet, we expect these fluctuations to continue to impact our bottom line with the adoption of the new accounting rules. We intend to add to our Bitcoin Holdings primarily through our production activities, and we will also continue to sell Bitcoin as a means of generating cash to fund monthly operating costs and for general corporate purposes. Given our positive financial results and our robust balance sheet, we believe Marathon is well-positioned to achieve our 2024 growth targets and to capitalize on any opportunities that present themselves around the upcoming halving. And that completes my update. I will now turn it back to Fred who will talk more about our operations and our ongoing plans.

Thanks, Salman. Those of you who have been tracking our pool will know that Q4's record performance was followed by temporary operational challenges in North Dakota and Texas, which started in mid-January and have now been resolved. These sites operated by Applied Digital experienced unplanned outages due to transformer and transmission line maintenance. In both instances, our team immediately began working with our hosting provider to find solutions to the issues, which are now resolved. As of this week, Ellendale is nearly back to full strength and Garden City has energized. While these maintenance issues are now resolved, we do currently expect Q4's record performance to outshine the first quarter of this year due to the prolonged impact. Regardless, we're confident that the best and most exciting times for our operation are still to come. One year ago, the world was a very different place for Bitcoin miners and for Marathon. We were in a bear market with Bitcoin price hovering around $23,000. Marathon itself represented less than 3% of the Bitcoin network with only 7 exahash online. We had a 280 megawatt portfolio of Bitcoin mining assets, all based in the United States. We had $226 million of liquidity and we carried $798 million of debt on our balance sheet. Today is a very different story. Bitcoin prices are hovering around $60,000. I just struck out the $55,000 in my script because Bitcoin kept moving up in price today. Marathon represents approximately 5% of the Bitcoin network with over 26 exahash online and more coming. We have a 900 megawatt portfolio of Bitcoin mining assets, diversified across 11 sites on three different continents. We have $1 billion of liquidity on our balance sheet and have reduced debt by over $411 million while saving our shareholders $100 billion in the process, resulting in net debt of $331 million. We're integrating our first major acquisitions and taking direct control of nearly half of our hash rate. But we're only just getting started. In 2024, we plan to grow our operational hash rate more than 35% to approximately 35 exahash to 37 exahash. By the end of 2025, we plan to be at 50 exahash, which is approximately double our current capacity. These targets are based on our current machine orders in the pipeline. However, we believe there are opportunities to accelerate the timeline and realize these targets even sooner. So you may ask how are we going to get there? To start, we have orders and options for machines that represent upwards of 45 additional exahash with orders for 22 exahash of miners already placed and inbound with the option to add another 23 exahash of capacity. Additionally, Marathon's investment in Auradine has already begun to pay dividends by providing us with an additional avenue to increased hash rate at an accelerated pace. If we choose to execute on these orders, we have the potential to reach 69.7 exahash. Since procuring machines is not a constraint on Marathon's growth, the obvious question is where do we deploy the next 45 exahash of miners? The two sites we recently acquired are the first part of the answer. Granbury in particular has substantial expansion potential, which we've discussed in press releases and on our last call. But to meet our appetite for growth, we will need to do much more, which will consist of both organic and inorganic growth domestically and internationally with a focus on optimizing costs to mine and utilizing sustainable energy sources. This is where our balance sheet comes into play. We have been building up a substantial stockpile of dry powder now totaling over $1 billion between cash and Bitcoin, and we intend to utilize it to continue growing our business through organic and inorganic means as opportunities arise. So far in 2024, we have raised $489.3 million at an average share price of $19.82. As our 10-K will show, we have filed a new shelf, giving us the option to raise an additional $1.5 billion through at-the-market equity offerings. This would bring our total potential war chest over $2.5 billion, if it were fully exercised. Today, the majority of our 900 megawatt Bitcoin mining portfolio predominantly consists of machines and large data centers that reside in their power stations in the United States. We believe there exist significant opportunities to develop utility-scale mining operations based on stranded energy outside of the United States, like our sites in the UAE and Paraguay. We will look for more opportunities in places such as the Middle East, Africa, Latin America, and elsewhere. But our organization is evolving, and we believe we can revolutionize the way people think about Bitcoin mining. Our long-term vision for Marathon is a diverse global organization that leverages Bitcoin mining technologies to build a more sustainable and inclusive future. Bitcoin miners excel at two things, consuming stranded energy and generating fees. And while most of our competition is focused on underutilized utility-scale grid energy, we are always asking ourselves what is the best way to utilize our technology and its unique attributes to create the most value. We believe one of those is through Bitcoin mining's version of recycling, which basically means converting what is currently a waste product into a productive resource. The pilot project in Utah, where we converted methane gas generated from a landfill into a productive source of power for Bitcoin mining, is only one example. There are some new projects our team has been developing that have a higher ROI than traditional Bitcoin mining based on using waste to generate energy and leveraging the heat from Bitcoin mining profitably for low-grade industrial processes. It would be premature to discuss details at this time. But given the scale and diversity of applications, we believe the market opportunity here is substantial and the prospects are incredibly exciting. Heat reuse is a concept that we see becoming more significant and scalable in the coming years. Bitcoin miners are more efficient at generating heat from electricity than most other alternatives, including more traditional methods which do nothing but create heat by consuming electricity. We are currently exploring projects that involve using heat from our mining systems of both large and small scale to provide heat for industrial processes, commercial buildings, homes, and even just the living room. It's only a matter of technology and capability, and Marathon has both. Marathon's Technology Group is finalizing the development of a highly scalable immersion technology that will enable heat reuse projects in many different form factors, sizes, and applications, and we'll be speaking more about this in the near future. Over the next five years, our objective is to have 1 gigawatt of power dedicated to these various applications that are separate from the utility-scale mining we're known for today, but that are directly in line with our core competencies. At the heart of these initiatives is our technology. While our growth team initiates potential new projects and our operations team develops and scales our sites, our technology team has been hard at work building and launching new tools and services for those who are building the future of Bitcoin. The first of these is Slipstream, which is the direct transaction submission service we announced last week. For the Bitcoin community, direct submissions are designed to mitigate censorship and encourage development on Bitcoin. For Marathon, the higher fees may help increase revenue. And as far as we know, Marathon is the only miner capable of offering a direct submission service and benefiting from the potential increase in transaction fees because we're the only miner that operates as a mining pool. This is one of the many reasons we believe there is strategic value in owning our own pool and focusing on vertically integrating our technology stack. Enduro, which we announced earlier today, is another innovation we have been hard at work on. We believe Enduro may be the world's first and most Bitcoin-native layer two network. It is intended to serve as infrastructure for the next generation of Bitcoin applications. This is something we have helped to incubate, but it is not something that we own. Enduro is for the pioneers driving to redefine blockchain adoption. Therefore, it will be community-led and community-driven. Why would we give something like this away for free to the community? It's actually quite straightforward. We have a vested interest in the Bitcoin ecosystem. We're the second-largest holders of Bitcoin among publicly traded companies and the largest single publicly traded organization working to process Bitcoin transactions and secure the network. Our core competency is converting energy into economic value in the form of Bitcoin. Therefore, as Bitcoin flourishes, so do we. This is also why we helped to raise approximately $800,000 in just four days last year to support Bitcoin core developers, $500,000 of which was contributed by Marathon itself. We believe that Enduro could have a positive impact on the community, but we also recognize that different people have different views on how best to extend the utility of Bitcoin. We believe in testing, iterating, and letting the market decide what works best. It is that experimental and agile mindset that is core to Marathon Digital Holdings. And as we look to scale in 2024 and beyond, it will remain one of the primary differentiators that sets Marathon apart. Marathon's leadership team consists of people who think differently and are willing to try divergent ways to execute and deliver on our vision. While 2023 was a banner year for Marathon, we have never been more optimistic about Marathon's future, and we look forward to building on our accomplishments to leverage all of our assets to build a more sustainable and inclusive future. And with that, I'll turn it back to Charlie for Q&A.

Thanks, Fred. At this time, we're going to commence the Q&A section of today's call. We'll start by answering some of the most popular questions submitted by investors through our Q&A platform. So the first question comes from Rex R., who asks, is the company more profitable after BTC halving?

I'll take that question. Thank you, Rex. Thank you for asking the question. Just for the benefit of everybody, halvings are unique to this industry and Bitcoin and force the industry to become more efficient every four years. The drop in the block reward forces the inefficient operators out, and the most efficient ones remain. We expect this to help us gain market share as we go through the halving. The impact on Marathon will depend on where the Bitcoin prices go from here. Obviously, there has been a great run in the Bitcoin price recently, and it all depends on how much the competition falls from here as well, because inefficient miners could drive some interesting activity in the marketplace. With that, we have a significant Bitcoin holding on our balance sheet. And given that fact, if we do the math in simple terms, every $10,000 change in Bitcoin price will result in approximately $200 million change in our EBITDA on an annualized basis. In the current price environment, we expect to be profitable with the assumption that certain machines will go down and will provide us the opportunity to grow value for our stockholders. Hopefully, that answers your question.

One thing I'll just add to Salman's great answers. The fact that we are very focused on growing parts of our business that generate higher IRRs than traditional Bitcoin mining. We have one of the most efficient fleets in the industry. If you think about the 45 exahash of machines that we have on inbound, our efficiency will drop from 24 joules per terahash down to somewhere around 22 or near 21 joules per terahash, again, maintaining the most efficient fleet in the industry. Our technology investments in heat reuse projects and areas adjacent to Bitcoin mining will allow us to mine Bitcoin at large scale across multiple smaller installations at costs that may sometimes approach near zero energy costs because we are actually paid to generate electricity in some instances. We believe as miners, if we target being in that lower quartile of miners, no matter what the price of Bitcoin and what the global hash rate is, we will always be able to operate relatively profitably.

Great. Thank you both. Our next question comes from Tarek A., who says, I love your work and think you're heading in the right direction. A lot of critics are worried that if the crypto market fluctuates, your company won't be able to handle the fluctuation. Fred, Salman, how do you address that concern?

I'll take that. Well, we've been focused on building resiliency. We're investing in technology, diversifying across the business and paying down debt, positioning ourselves for the worst storms, no matter what might happen. We have one of the strongest balance sheets in the sector with $1 billion in cash and Bitcoin, which gives us the strength to survive whatever comes our way. Most importantly, this is not our first cycle. Marathon was built during the last down cycle. We have maneuvered it well and have come out on top of the industry again. We've never been more confident in our future. So I hope that answers your question.

Thanks, Fred. We have a few questions that are similar, so I'll combine them back to back. The first is from CK, who asks why did Marathon use equity to purchase 183.5 Bitcoin in January after stating on the Q3 earnings call in November that equity was only to be used to drive growth and hash rate? Also, please explain the 2024 treasury strategy, i.e., what is your target HODL cash for halving in the end of 2024? And then similarly, Sameer A. asks, will the company purchase any more Bitcoin for its balance sheet? Either of you would like to take that and speak a little bit to Marathon's treasury management strategy?

Sure. I'll take that. Thank you for asking the question. Look, the company has stated in the past that we want to utilize equity for growth purposes and investment in exahash, whereas we've utilized Bitcoin for paying for our operating costs. That's primarily what our stated strategy has been and we followed that along. In terms of how we have used cash, opportunistically, we have looked at the cash to take advantage of drops in Bitcoin pricing in certain cases. As you know, cash sitting on the balance sheet can yield about 5% in US Treasuries. When we look at it, we approach it from an investment standpoint, how can we maximize our investments either in cash or Bitcoin? There are opportunities that arise, like an unusual situation that happened in January with the ETF launches where the price temporarily dropped, and we knew that the price was going to come back up. It was a great opportunity to create more value for our stockholders. And we took a small position, which has been profitable for us instead of just having a 5% rate of return on US Treasuries. Our core business remains Bitcoin mining, and our primary focus and source of equity will be growth investment. Given the unique situation with Bitcoin prices, we don't expect these opportunities to regularly arise, but we will be opportunistic on a small scale, if you will. Our HODL position and cash provide us a great mechanism to weather any downturns as Bitcoin price fluctuates through different cycles, especially with the halving. When we're positioning from that perspective, it also provides a great opportunity for investors to ride the price as Bitcoin appreciates from here. Just to summarize, in the future, we may monetize Bitcoin for investing in our company and for general corporate purposes. But as of now, our focus remains to use equity for growth and Bitcoin for operating costs.

Great. Thanks, Salman. Next question comes from Michael Hess who asks, what is your ETH or Ethereum mining percentage and your Bitcoin mining percentage and overall mining capacity as of today? How much Bitcoin and Ethereum are on hand at the company currently? Fred, do you want to take that one?

Sure, we don't mine Ethereum.

Short and sweet. All right. Next question comes from Manhar C., who asks, what are your plans to compete with competitors based on the hashing power metrics? MARA does hold a lot of Bitcoin, but the efficiency is somewhat less as compared to Riot and CleanSpark. Are there any plans to address that?

We're constantly focused on really two things in our mining business, energizing more hash rate and optimizing the hash rate that we have. Our efficiency has increased significantly year-over-year, partially because of the machines that we deploy. We are one of the most energy efficient fleets in the industry, and continuing to maintain that will be a critical part of our strategy. We also are one of the most efficient miners among publicly traded miners on an SG&A basis. You have to look at the total cost to mine. You can't just look at your marginal cost to mine a Bitcoin; you have to consider total expenses. We believe that we operate as one of the more efficient miners, using that metric already today. But we are very focused on optimization and are going to continue to implement more of our technology across our fleet, which we believe will further improve our operational efficiency. Now, as we take control of more and more sites, if you compare us, for example, to CleanSpark and Riot who predominantly own their sites, we now own and control 44% of our hash rate. We expect to see that number grow substantially to the point where the vast majority of our hash rate is owned and operated, which means that we have a significant opportunity for cost reductions just through the operating line, which we believe will put us on par, if not better than those competitors.

Great. Thanks, Fred. I think we'll do one more just in the interest of time. Last question, at least of the prepared questions, comes from Michael W., who asks, what is the plan post-halving to ensure revenue stays the same or goes higher? I think we've addressed this a little. But, Fred, do you want to take that one?

When the halving occurs, you produce half as many Bitcoin for the same amount of hash rate, assuming global hash rate stays the same. One of the reasons we have set such aggressive growth targets is to ensure we continue to grow our hash rate and our percentage of the global hash rate for all miners. So our focus is on rapid growth and optimizing existing operational metrics, while also generating revenues that are complementary to mining from our technology products and areas adjacent to them.

Great. So, at this time, we'll wrap up the prepared questions. Again, we really appreciate all the questions and the interest from our investors and the consistent dialog. So, please feel free to keep submitting those and contact us anytime. At this point, I'm now going to turn the call back to our operator, Kevin, to open the line to questions from our covering analysts. Kevin, back to you.

Thank you. We will now be conducting a question-and-answer session with Marathon’s covering analysts. One moment please while we poll for questions. Our first question is coming from Tyler DiMatteo from BTIG. Your line is now live.

Yes. Hey, everyone. Thank you for taking the time, and good afternoon. And congrats on the excellent 2023 as well. Fred, I'm just curious here, we've made a lot of strides on expanding the hash rate as we rollout the different technology offerings. As you look out for the rest of this year and into 2025, I mean, how do you think about prioritizing the expansion of your own hash versus maybe some of these other tech offerings and kind of going back-and-forth between the two?

Sure, great question. You can think about our business as organized around three predominant silos. One is what we call utility-scale mining; this is our traditional model. Sites like King Mountain or Granbury, Kearney, and what we're doing in UAE, et cetera—large-scale sites, hundreds of megawatts sitting behind the meter or adjacent to the power source and helping balance grids. We see very large international opportunities; the UAE sites together are 250 megawatts. Today, we have opportunities to expand further, not only in the Gulf region, but also in Africa and Latin America, where we're currently operating in Paraguay and will continue to do that. The second silo is what we call energy harvesting. This is where we leverage Bitcoin mining as a producer of heat and predominantly find sources of energy such as methane flare gas and other forms of recyclable biofuels that we use to generate energy. In some cases, we're actually paid to do that and recycle heat back into an industrial process, which we are again paid for. Our technology group has developed solutions, and together with the partners we're working with, we're able to build these projects at small, medium, and large scales. So I think you'll see news later this year of some of the first of those projects arising. That's a sector we expect to grow to over a gigawatt of power over the next five years. The technology sector consists of software, firmware, controller boards, a variety of other technologies, as well as now Slipstream and Enduro. While Enduro is a technology we have helped incubate, it's not something we intend to own. Slipstream does generate revenues, and we already have customers who have bought and are using our firmware. We expect to see more sales in those areas. As our next-generation immersion technology comes to market later this year, we expect that to begin generating significant revenues as well. If you look over a five-year period, and I'm sorry for the long-winded answer, but if you look over a five-year period, you'll see that by the next halving in 2028, I anticipate kind of 50% of our revenues coming from traditional utility-scale mining and 50% from elsewhere, with 50% of the revenues coming domestically and 50% internationally. I hope that answers your question.

Okay, great. Thank you. Really appreciate it. Very helpful. And then, Fred, on your comments on Slipstream, how should we think about the rollout of that and the actual implementation and generally—management, how you're thinking about bringing that and kind of scaling that market?

Slipstream is a simple API submission system. You submit a block, and that block goes into a queue. It's a hands-free system, meant to be user-friendly. The idea is to streamline the experience so that users can easily utilize the service. We believe this will enhance user experience and position us uniquely within the market.

Okay great, thank you. I'll turn it back to the queue. I really appreciate the time.

Thank you. Next question is coming from Joe Flynn from Compass Point Research. Your line is now live.

It looks like power prices crept up a bit from the third quarter. Back then, like $6.5 levels, just kind of curious if you could provide more color there and how we should think about all empowered hosting costs as you guys have transitioned to the 40% owned today? Is that our model? Thanks.

One way to look at that is that in our normal model, before being an owner-operator, we don't typically get the benefit of curtailment when an operator curtails. Because they get the economic benefit of curtailment. There were some winter events in Q4 that impacted that, and energy prices may have fluctuated as well. I think historically our energy and overall costs have been about $0.06 per kilowatt-hour. As we take control of our sites, I think you'll see the cost per kilowatt-hour drop somewhere between $0.01 to $0.015, possibly more per kilowatt-hour. The other advantage of being an owner-operator is we can now take advantage of economic curtailment, power hedges, and buying and selling power. We've already seen the economic benefits of that a handful of times this year. Overall, we should aim to operate where the operational cost above the power cost is somewhere between $0.0075 to $0.0125 a kilowatt-hour.

Yes. Just to add to that. In Q4, we had record production, and it's all about the scale—how much of that production can you squeeze out of that cost. There is a fixed component of the cost. With transaction fees being at a record high this quarter, that certainly helped us as well from a unit cost perspective. Hopefully that helps answer your question.

Thank you. Next question today is coming from Reginald Smith from JP Morgan. Your line is now live.

Hey, good evening. Thanks for taking the question. I guess most topics have been covered. But, Fred, I wanted to get your opinion. A lot of public miners have announced fairly large ATM offerings. Again, competitively, as you look across the landscape, both private and public companies, do you have a sense of how much capital is out there, perhaps on the private side as well, to fund growth? And I'm curious, should we expect or do you expect the public miners will continue to garner a larger piece of the network cash rate? What's industry CapEx kind of look like on a normalized basis? And these are all hard questions. I think you're the best person to reply.

A generally speaking, this industry has three chokepoints, three constraints. It’s access to capital, as you mentioned, access to capacity, sites to plug miners in, and access to miners. In different cycles, there have been different constraint points. In the prior cycle, access to machines was the constraint point, and now it’s capital. Public miners that are ASR eligible, able to raise money through ATMs, have a significant advantage over everybody else. The investment community today is moving towards a flight-to-quality. They’re looking for miners who are able to scale. Smaller miners are challenged by having fixed costs that they cannot scale effectively, making it difficult to survive. This industry more resembles a jungle where a gazelle gets up every morning and has to run faster than the lion while the lion has to run faster than the gazelle to survive. The innovative cycles are also accelerating. If miners can't raise significant amounts of money, they will be left behind. You’re seeing capital moving towards those who are capable of scaling, while smaller miners may struggle to do so as Bitcoin price stabilizes.

Thank you. We've reached the end of our question-and-answer session. I'd like to turn the floor back over to Charlie for any further or closing comments.

Thanks, Kevin. Thank you all for your time today. If you have questions that were not answered during today's call, please feel free to contact our Investor Relations team at [email protected]. Thank you, and enjoy the rest of the day.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.