Sign in

You're signed outSign in or to get full access.

TI

TERAWULF INC. (WULF)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 was a transformational inflection: total revenue rose to $50.6M (+6% QoQ, +87% YoY) with first HPC lease revenue of $7.2M; Adjusted EBITDA improved to $18.1M (+25% QoQ) while GAAP net loss was driven by a non‑cash $424.6M mark‑to‑market on warrants/derivatives .
  • Commercial momentum accelerated: ~594 MW of contracted HPC capacity (Core42 and Fluidstack/Google) at Lake Mariner plus a 168 MW Abernathy JV, with ~$17B+ in long‑term customer contracts and ~$5B+ long‑term financings including $3.2B senior secured notes and $1.025B 2032 converts .
  • Guidance/narrative upgrades: annual HPC signing target raised to 250–500 MW; HPC leasing margins expected to normalize toward ~85% in Q4 after a 3Q stub period; mining operating capacity guided to ~7.2 EH/s in Q4 as site power is reconfigured to HPC .
  • Liquidity strengthened: quarter‑end cash, cash equivalents, and restricted cash reached $712.8M; total debt ~$1.5B (primarily convertibles); pro forma liquidity >$1B after October transactions .
  • Catalysts: execution milestones (CB‑2 delivery around year‑end), Abernathy financing “before year‑end,” and visible multi‑year HPC ramp with Google credit enhancement underpin institutional capital access .

What Went Well and What Went Wrong

What Went Well

  • HPC commercialization began: “We recorded our first HPC revenues with lease commencement at Wolf Den and CV1” (CEO) as gross HPC lease revenue reached $7.2M in Q3 .
  • Strategic financings at scale: Closed $3.2B senior secured notes backed by Google lease support to fund Lake Mariner HPC buildout, plus $1.025B 2032 convert to support Abernathy JV; management highlighted a repeatable development/financing model .
  • High‑quality counterparties: “We have two world‑class credits…Core42 backed by G42, and FluidStack Google” (CEO), with ~$6.7B contracted revenue at Lake Mariner and $1.3B Google credit support for Abernathy .

What Went Wrong

  • GAAP loss inflated by non‑cash fair‑value charges: $424.6M loss from change in fair value of warrants/derivatives drove net loss to $(455.1)M; depreciation rose on accelerated miner building depreciation ($7.8M) tied to HPC reconfiguration .
  • Mining output down QoQ: BTC mined fell to 377 from 485 in Q2 as operating hash rate was repositioned for HPC; mining capacity expected to target 7.2 EH/s in Q4 .
  • HPC margin below long‑term guide in start‑up quarter: HPC leasing segment realized ~72% profit margin due to partial‑quarter revenue and ~$0.7M Cayuga development expense; management expects normalization toward ~85% in Q4 .

Financial Results

Consolidated Results vs Prior Quarters

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$34.405 $47.636 $50.578
HPC Lease Revenue ($USD Millions)$0 (HPC revenue to begin in Q2) $0 (HPC revenue commenced Q3) $7.203
Cost of Revenue excl. Depreciation ($USD Millions)$24.553 $22.094 $17.123
Diluted EPS ($USD)$(0.16) $(0.05) $(1.13)
Adjusted EBITDA ($USD Millions, non‑GAAP)$(4.695) $14.531 $18.126

Segment Performance and Margins

MetricQ1 2025Q2 2025Q3 2025
Digital Asset Revenue ($USD Millions)——$43.375
HPC Lease Revenue ($USD Millions)——$7.203
Mining Segment Margin ($USD Millions, non‑GAAP)$7.0 $22.0 $23.7
HPC Leasing Segment Profit Margin (%)——~72%
Adjusted EBITDA ($USD Millions, non‑GAAP)$(4.7) $14.5 $18.1

KPIs

KPIQ1 2025Q2 2025Q3 2025
Bitcoin Mined (#)372 485 377
End‑of‑Period Hash Rate (EH/s)12.2 12.2 11.6
Power Cost (Mining) ($/kWh)$0.081 ~$0.05 guided 2H25 $0.047
EOP Active Leased HPC Load (Net MW)——18 MW
Cash, Cash Equivalents & Restricted Cash ($USD Millions)$218.2 $91.4 $712.8
Total Outstanding Debt ($USD Billions)~$0.5 ~$0.5 ~$1.5
Net Debt ($USD Millions)$281.8 —$787.2

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Annual HPC lease signingsOngoing annual100–150 MW (prior) 250–500 MW Raised
HPC leasing margin (%)Q4 2025~75% (Q2 updated guidance) ~85% normalization expected Raised
Mining operating capacity (EH/s)Q4 2025Targeting ~12 EH/s (earlier framework) ~7.2 EH/s targeted for Q4 2025 Lowered (HPC prioritization)
SG&A (FY 2025)FY 2025$40–$45M (Q1 deck) $50–$55M (updated in Q2) Raised
Core42 CB‑2 deliveryQ4 2025On track for Q4 Around year‑end, subject to tenant fit‑out Maintained
Abernathy financing2025 YE—Market “before year‑end” (similar to Wolf Compute) New disclosure

Earnings Call Themes & Trends

TopicPrevious Mentions (Q‑2 and Q‑1)Current Period (Q3 2025)Trend
AI/HPC tenant pipeline & creditSigned FluidStack (200+ MW) with ~$1.8B Google backstop; raised SG&A guide to support HPC; Core42 ramp (Q2) Expanded to ~366 MW FluidStack at Lake Mariner and Abernathy JV (168 MW) with $1.3B Google credit support; annual target lifted to 250–500 MW Accelerating
Financing access & structurePlanning capital markets initiatives; improved credit profile via Google support (Q2) Executed $3.2B BB‑rated green notes; $1.025B 2032 converts; repeatable model outlined Positive
Power strategy & site selectionLake Mariner approvals toward 500–750 MW; Cayuga ground lease (Q1/Q2) Disciplined multi‑site funnel; awareness of grid constraints; potential island generation in future Strategic, proactive
Mining operations & capacityHash rate increased; Q1 power cost spike; guidance to 2H25 normalization Operating hash rate repositioned for HPC; BTC mined down QoQ; Q4 target 7.2 EH/s Mixed (profitability focus)
Lease accounting/timingQ2: HPC revenue begins in Q3 Straight‑line revenue; stub period impact; deferred rent mechanics explained Improved disclosure

Management Commentary

  • CEO: “The third quarter was truly transformational… signing approximately 360 megawatts… backstopped by Google… and closing $3.2 billion in senior secured financing” .
  • CEO on demand/priorities: “We recently increased our annual target for new HPC signings from 100–150 megawatts per year to 250–500 megawatts per year… reflecting the strength of customer demand” .
  • CFO on profitability: “GAAP revenues increased 6% QoQ to $50.6 million… Adjusted EBITDA improved 25% QoQ to $18.1 million… inclusive of significant increases in operating expenses and SG&A… invested heavily in our HPC business” .
  • CFO on non‑cash loss: “Change in fair value of warrant and derivative liabilities in 3Q 2025 was a loss of $424.6 million related to the Google warrants and the conversion feature of the 2031 convertible notes” .

Q&A Highlights

  • HPC margins: Actual ~72% in Q3 due to partial revenue and ~$0.7M Cayuga expense; management expects ~85% in Q4 (normalization with full quarter) .
  • Customer diversification/credit quality: Focus remains on tier‑one credits (Core42/G42, FluidStack/Google), with ongoing dialogues; credit quality is key to financing terms .
  • JV financing & penalties: Abernathy financing expected before year‑end under similar structure; leases have grace periods and scaled penalties; termination cannot occur until >180 days late .
  • Mining reconfiguration: Hash rate reduced as site power is reallocated to HPC; accelerated depreciation and miner sales reflect repositioning while maintaining profitability .
  • Build costs & procurement: Capex/MW higher than Core42 due to scale and customized designs; rolling procurement schedules with equipment vendors to ensure delivery timelines .

Estimates Context

  • S&P Global consensus for Q3 2025 revenue, EPS, and EBITDA was unavailable via our data feed at this time; therefore, comparisons to Street estimates cannot be provided. Analysts will need to incorporate the new HPC segment (straight‑line lease accounting, power passthrough) and Q4 normalization into models based on disclosed mechanics .

Key Takeaways for Investors

  • The core thesis is shifting from pure mining to contracted, credit‑enhanced HPC infrastructure with multi‑year, high‑margin, infrastructure‑style cash flows; execution risk is mitigated by Google backstops and agency‑rated debt .
  • Near‑term EBITDA trajectory should benefit from full‑quarter HPC revenue in Q4 and target margin normalization to ~85% as Core42 ramps and Akela/La Lupa progress .
  • GAAP results will remain noisy due to non‑cash fair‑value items (warrants/derivatives) and depreciation tied to asset repurposing; focus on non‑GAAP segment margins and lease economics .
  • Liquidity and capital access are robust (> $1B pro forma), supporting accelerated build schedules and new site acquisitions amid a power‑constrained environment .
  • Watch delivery milestones (CB‑2 year‑end), Abernathy financing timeline, and additional site announcements (management hinted at 1–2 sites by year‑end) as stock catalysts .
  • Mining remains opportunistic and power‑price sensitive; guidance to 7.2 EH/s reflects strategic prioritization of HPC revenue density over nameplate hash rate .
  • The raised 250–500 MW annual signing target suggests sustained demand tailwinds; diligence on grid capacity and permitting remains the gating factor—management’s disciplined funnel is a differentiator .