Marathon Digital Holdings (MARA), a major publicly-traded Bitcoin mining company, reported a staggering $1.7 billion net loss for the fourth quarter of 2025, primarily driven by a $1.5 billion markdown on its Bitcoin holdings following a roughly 30% decline in BTC's price during the period. Despite the massive loss, the company's stock surged over 15% after it simultaneously announced a strategic joint venture with Starwood Capital Group to pivot into the artificial intelligence data center market.
The quarterly financial results revealed revenue of $202.3 million, a 6% decline from $214.4 million in Q4 2024. Adjusted EBITDA was negative $1.49 billion, a sharp reversal from a positive $796 million in the prior year. Earnings per share came in at negative $4.52, missing analyst expectations. For the full year 2025, revenue reached $907.1 million, up 38% from 2024, but the company recorded a full-year net loss of $1.3 billion.
The partnership with Starwood Capital Group, which manages over $125 billion in assets, is a landmark strategic shift. The agreement will convert select Marathon mining sites across the United States into large-scale data centers capable of serving enterprise cloud and AI customers. Starwood's data center arm, Starwood Digital Ventures, will lead the design, construction, and tenant sourcing. The joint venture aims to deliver approximately 1 gigawatt of computing capacity in the near term, with plans to scale beyond 2.5 gigawatts over time. The two firms will jointly finance and operate the projects.
This pivot reflects a broader industry trend where Bitcoin miners, facing squeezed profit margins after the recent halving event, rising power costs, and intense competition, are repurposing their power-rich infrastructure. Marathon's CEO, Fred Thiel, emphasized in a shareholder letter that "Bitcoin remains a core pillar of MARA’s strategy" and that the company's long-term conviction in the asset class is unchanged. However, the new model positions Bitcoin mining as a flexible baseline workload while scaling higher-margin AI compute operations.
Operationally, Marathon expanded its energized hashrate by 25% year-over-year to 66.4 EH/s, but Bitcoin production declined to 2,011 BTC in Q4 from 2,144 BTC in the prior quarter. The company held 53,822 BTC, worth approximately $4.7 billion, at the end of 2025, with a portion loaned or pledged as collateral.
