TeraWulf tops Q3 revenue estimate as HPC lease income climbs

TeraWulf (WULF) reported third-quarter revenue of $76.23 million, above the $63.03 million consensus estimate, as HPC lease revenue rose sharply. The company posted a diluted loss of 3 cents per share, a smaller loss than the 19 cents expected.

HPC lease revenue reached $62.99 million, about 83% of the total and up from $7.20 million a year earlier. The net income was helped by a non-cash change in the fair value of warrants.

Here's how the company did:

• Revenue: $76.23 million vs. $50.58 million a year earlier, $63.03 million expected
• Diluted EPS: loss of 3 cents per share vs. loss of $1.13 per share a year earlier, 19 cents expected
• Adjusted EBITDA: negative $12.8 million vs. $18.1 million a year earlier
• Net income attributable to TeraWulf: $709.9 million vs. loss of $455.1 million a year earlier

Guidance and construction

The company reaffirmed its target of contracting 250 MW to 500 MW of incremental critical IT capacity a year. Lake Mariner has 102 MW of revenue-generating capacity and 336 MW under construction across CB-4 and CB-5.

CB-4 remains on track for phased delivery and rent commencement in the fourth quarter. CB-5 is targeted to begin phased delivery in early 2027. WULF Compute continues within cost guidance of $8 million to $10 million per critical IT MW.

At Justified, the company executed a 20-year lease with Anthropic for about 401 MW of critical IT capacity, representing about $19 billion of contracted revenue over the initial term. Fluor Enterprises, Inc. is the engineering, procurement and construction contractor, and phased ready-for-service completions are expected to begin in late 2027 and run through the second quarter of 2028.

The company increased contracted power at Muskie from 500 MW to 1,000 MW through amended agreements with Kentucky Power Company. The change is subject to approval by the Kentucky Public Service Commission, and the second 500 MW phase is now expected in 2029.

Balance sheet and Abernathy sale

The company ended the quarter with about $2.4 billion of cash, cash equivalents and restricted cash. It raised $1.20 billion from common stock issuance, net of issuance costs, during the first nine months.

The company completed the sale of its 50.1% interest in the Abernathy Joint Venture and received $250 million in cash during the quarter. It expects $150 million by Dec. 31, 2026, and about $130 million, subject to certain adjustments, by April 30, 2027. The sale produced a $95 million gain.

After quarter-end, the company increased its revolving credit commitments from $250 million to $400 million. It also added an uncommitted accordion feature permitting up to $150 million of additional commitments, subject to certain conditions.