TeraWulf Q2 Earnings Call Highlights

Key Points

• Revenue and HPC leasing grew: Second-quarter revenue rose to $44.8 million from $34.0 million, while HPC lease revenue increased 52% sequentially to $31.9 million, representing about 71% of total revenue. The company still posted a $939.9 million GAAP net loss, largely due to a $755.7 million non-cash loss on Google warrants.
• Capacity and expansion are accelerating: Lake Mariner reached 102 MW of revenue-generating capacity, with additional CB-4 lease revenue expected in late September. TeraWulf also signed a 20-year, approximately 401-MW Anthropic lease in Kentucky valued at about $19 billion in contracted revenue and acquired the gigawatt-scale Muskie Data Campus.
• Liquidity supports planned growth: TeraWulf held approximately $3.0 billion in cash and restricted cash at quarter-end and expects Abernathy sale proceeds of about $530 million. Management said available liquidity should fund Lake Mariner commitments, the Muskie investment, the Chesapeake acquisition and other near-term needs without issuing equity.

TeraWulf NASDAQ: WULF said its second-quarter results reflected growing high-performance computing, or HPC, lease revenue as additional capacity came online at its Lake Mariner campus, alongside a broader expansion strategy that includes a major Anthropic lease in Kentucky, the acquisition of the Muskie Data Campus and a planned sale of its interest in the Abernathy joint venture.

Revenue totaled $44.8 million in the second quarter, up from $34.0 million in the first quarter. HPC lease revenue rose 52% sequentially to $31.9 million and accounted for about 71% of total revenue, according to Chief Financial Officer Patrick Fleury.

The company reported a GAAP net loss attributable to TeraWulf of $939.9 million, compared with a $427.6 million loss in the prior quarter. Fleury said the increase was primarily driven by a $755.7 million non-cash loss from the change in fair value of Google warrants, reflecting an increase in TeraWulf’s stock price. The adjustment had no impact on liquidity, he said. Non-GAAP adjusted EBITDA was negative $18.3 million, versus negative $4.1 million in the first quarter, as the company incurred pre-revenue operating and development costs ahead of further HPC capacity deliveries.

Lake Mariner Capacity Moves Into Service

Chairman and CEO Paul Prager said the company completed its CB-3 building at Lake Mariner, bringing total revenue-generating critical IT capacity at the campus to 102 megawatts as of early July. The completion also satisfied conditions for $600 million of Google credit support for Fluidstack’s lease obligations to become effective.

Chief Technology Officer Nazar Khan said the first CB-4 data hall was in Level 2 commissioning and was expected to enter Level 3 commissioning in mid-August. TeraWulf expects the first CB-4 data hall to reach its contractual delivery milestone and begin generating lease revenue in late September. The first CB-5 data hall is expected to begin energizing in very early January.

Khan said electrical labor availability and customer-driven design optimization had been the most significant execution variables. TeraWulf added a second electrical contractor and scaled its workforce to support roughly 1,000 electricians at peak staffing levels.

Fluidstack lease amendments executed in early July increased contracted capacity at both CB-4 and CB-5 from 162 MW to 168 MW. Fleury said TeraWulf will contribute about $150 million for tenant fit-out costs incurred through June 30, 2026, in exchange for more than $300 million of incremental lease revenue over the initial 10-year term. Including the expanded contracted capacity, the amendments are expected to add more than $500 million of lease revenue over the initial lease terms.

TeraWulf’s reported HPC leasing segment profit margin was approximately 28% during the quarter. Fleury said that figure included tenant fit-out revenue and costs, $6.8 million of pre-revenue operating costs at WULF Compute and $6.0 million of development costs at uncontracted sites. Excluding those items, the segment margin was approximately 80%, compared with the company’s long-term target of about 85%.

Kentucky Expansion Includes Anthropic Lease

Following the quarter’s end, TeraWulf signed a 20-year lease with Anthropic for approximately 401 MW of critical IT capacity at the Justified Data Campus in Hawesville, Kentucky. Prager said the agreement represents approximately $19 billion in contracted revenue during the initial lease term and expands the company’s relationship with Anthropic.

The company also acquired the Muskie Data Campus in Eastern Kentucky, a gigawatt-scale development site located in an industrial park. The campus is being developed with Kentucky Power, an American Electric Power company, under electric service arrangements governed by a Kentucky Public Service Commission-approved data-center tariff.

Kentucky Power is expected to build a new 345-kilovolt substation connected to AEP’s existing 765-kilovolt transmission system, with initial electric service expected in the fourth quarter of 2028. TeraWulf said it is increasingly optimistic that Muskie could eventually expand to as much as 2 GW, and management said commercialization discussions were active with prospective customers.

Management reiterated its target of contracting an incremental 250 MW to 500 MW of critical IT capacity annually. Khan said that range reflects not only customer demand but also the capital, equipment and labor required to execute projects, noting that a project at the high end of the range can require nearly $5 billion of total capital.

Abernathy Sale and Chesapeake Progress

TeraWulf agreed after quarter-end to sell its entire 50.1% interest in the Abernathy joint venture for approximately $530 million. Fleury said the transaction represents a 20% internal rate of return on TeraWulf’s original investment. The company received an initial $250 million payment in July, expects another $150 million on or before Dec. 31, 2026, and expects approximately $130 million on or before April 30, 2027, subject to transaction terms.

Prager said selling the investment would allow TeraWulf to focus capital and management attention on large-scale projects where it controls the site, power infrastructure, development process and customer relationship.

Separately, the Federal Energy Regulatory Commission on July 29 authorized TeraWulf’s proposed acquisition of the Morgantown site, a key regulatory condition toward closing the Chesapeake transaction. The site includes approximately 210 MW of existing grid-connected generation and could potentially support an integrated generation, storage and data-center campus with up to 1 GW of data-center capacity, subject to remaining closing conditions and required consents.

Liquidity and Capital Outlook

Cash and restricted cash totaled approximately $3.0 billion at June 30. Parent-level unrestricted cash was approximately $1.2 billion at quarter-end and increased to about $1.45 billion after the initial Abernathy payment.

At WULF Compute, gross cash totaled approximately $1.9 billion, or about $1.5 billion after accounting for debt service reserves and interest-during-construction accounts. The company had completed approximately $2.3 billion of project capital expenditures at Lake Mariner, with about $1.7 billion remaining; roughly two-thirds of the remaining spending is committed.

TeraWulf now estimates total WULF Compute project costs of approximately $9.1 million per critical IT MW, within its original $8 million to $10 million per-MW guidance range. Fleury said the updated estimate incorporates electrical labor constraints and evolving customer equipment and operational requirements.

The company said existing liquidity and expected Abernathy proceeds should fund its remaining Lake Mariner commitments, planned Muskie equity investment and letter-of-credit needs, the proposed Chesapeake acquisition and other sites being pursued without accessing equity capital markets. Management said it expects to use project-level financing for future development, while maintaining what Fleury described as conservative leverage and a healthy equity layer.

About TeraWulf (NASDAQ:WULF)

TeraWulf, Inc NASDAQ: WULF is a digital asset infrastructure company focused on the development and operation of zero-carbon bitcoin mining facilities. The company integrates sustainable power generation with high-density data center technologies to deliver environmentally responsible digital asset mining services. Its core business revolves around designing, building and operating large-scale mining projects powered exclusively by renewable or emissions-free energy sources.

One of TeraWulf’s flagship projects is “Project Nautilus,” located in Tompkins County, New York, which harnesses hydroelectric power sourced from the New York State Electric & Gas (NYSEG) grid.

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