TERAWULF INC. (WULF)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 revenue rose sequentially to ~$35 million, while non-GAAP Adjusted EBITDA fell to $2.5 million as unusually high December/January power prices, a planned November outage to connect redundant power for HPC, and a miner refresh weighed on profitability .
• Strategic pivot advanced: a 10-year, 72.5 MW Core42 HPC data center lease was executed (with 3% annual escalator), expected to generate “over $1 billion” in cumulative revenue; Core42 holds an option for up to an additional 135 MW through March 31, 2025 .
• Balance sheet and capital allocation: $274 million cash/bitcoin at year-end, a $500 million 2.75% 2030 convertible issuance, elimination of legacy term loan in 2024, and over $150 million share repurchases to date; $90 million of prepaid revenue from Core42 was received in Q1 2025 .
• Key near-term catalysts: Core42 option decision (by 3/31/25), project financing for HPC (management cites strong lender appetite), MB-5 energization and miner fleet upgrade to ~13.1 EH/s in 1H 2025 .

What Went Well and What Went Wrong

• What Went Well

  • Landed long-duration HPC demand: “over $1 billion” revenue from the initial 10-year 72.5 MW Core42 lease; 3% annual escalator and two 5-year extensions underscore durable economics .
  • Liquidity and financial flexibility: year-end $274.5 million cash/bitcoin, $500 million converts, legacy term loan repaid, and $150+ million buybacks executed, supporting HPC buildout and shareholder returns .
  • Platform scalability and unit-cost edge: 9.7 EH/s deployed by Q4; management targets 13.1 EH/s and 18.2 J/TH efficiency in 1H 2025; realized 2024 power price averaged $0.043/kWh, supporting lower-cost mining and competitive HPC hosting .

• What Went Wrong

  • Power price spike: December and January Zone A prices were 2.0–2.5 standard deviation events versus 10-year history, driving Q4 cost of revenue up (to ~$19.6 million) and compressing EBITDA .
  • Operational downtime and miner refresh: a planned outage (≈1 week) to connect redundant power and warranty-driven miner swaps (~1.3 EH/s affected) reduced Q4 production to 423 BTC (from 555 in Q3) .
  • Q4 profitability pressure: non-GAAP Adjusted EBITDA declined to $2.5 million (from $6.0 million in Q3) as power costs per BTC rose to $46,328 (from $30,448 in Q3) and stock-based comp lifted SG&A .

Financial Results

Notes:

• FY 2024 results (for context): Revenue $140.1 million; non-GAAP Adjusted EBITDA $60.4 million; GAAP net loss $(72.4) million .
• Q4 revenue figures reflect company communications and investor presentation; management also referenced “~$35 million” on the call .

Segment breakdown: Not applicable. Revenue in 2024 was primarily from Bitcoin mining; HPC hosting under the Core42 lease commences in 2025. A $90 million prepayment was received in Q1 2025 (not recognized in Q4) .

KPIs (operational)

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Our initial 72.5-megawatt contract with Core42 will generate over $1 billion of revenue over the initial 10-year term… an incremental 100 to 150 megawatts of HPC revenue will generate $1.4 billion to $2.1 billion over 10 years.” — Paul Prager, CEO
• “December was very cold… January was very cold… December’s price was a 2 standard deviation event and January’s was a 2.5 standard deviation event. Those have reverted.” — Patrick Fleury, CFO
• “We repurchased $150 million of stock… the first return of capital by any public Bitcoin miner.” — Paul Prager, CEO
• “We anticipate providing detailed 2025 guidance… as soon as practical,” pending Core42 option .

Q&A Highlights

• Training vs inference at Lake Mariner: management says the site can support both; price terms are fully contracted under Core42 .
• Site expansion focus: prioritize Cayuga (energy-available in 2026), plus Montana and Mid-Atlantic; selective on Texas and potential overseas opportunities .
• Core42 option and timing: management refrained from specifics while discussions are ongoing; will update the market once decisions are finalized .
• Power price volatility: December/January spike characterized as 2.0–2.5σ events; forward curve suggests reversion toward ~$0.045/kWh longer term .
• Project financing: multiple lenders indicated interest; pursuing a competitive process led by JPMorgan and Morgan Stanley; targeting ~70% leverage .

Estimates Context

• Wall Street consensus (S&P Global) for Q4 2024 revenue and EPS was unavailable at time of analysis due to S&P Global daily request limits. As a result, we cannot characterize beats/misses versus consensus for this quarter.

Key Takeaways for Investors

• The Core42 contract de-risks the initial HPC pivot with long-duration, escalated cash flows; watch for the up-to-135 MW option decision by 3/31/25 as a major stock catalyst .
• Near-term earnings volatility (power spikes, outage, miner refresh) pressured Q4 profitability, but conditions have normalized and fleet/MB-5 upgrades should lift mining efficiency in 1H 2025 .
• Balance sheet is robust and positioned for HPC scale with $274.5 million cash/bitcoin at year-end, $500 million converts, and demonstrated commitment to buybacks ($150+ million to date) .
• Strong project finance backdrop and prepaid revenues (received $90 million in Q1 2025) support a largely non-dilutive HPC buildout, a key medium-term valuation driver .
• Strategic advantage resides in power-first site selection (land, water, fiber, grid redundancy) and management’s energy infrastructure expertise—critical differentiators as power becomes the gating factor for AI/HPC .
• Watch for formalized 2025 guidance once Core42 option clarity is achieved; additional customer wins and project financing announcements could re-rate the shares .

Citations:
Press release and 8-K:
Q4 2024 earnings call transcript:
Q3 2024 press release and call:
Q2 2024 8-K and call: