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01/09 20:10
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary and Q&A section reveal strong financial performance and optimistic guidance, particularly with the Fluidstack agreement and high margins. Despite some concerns about margins and project timelines, management's strategic partnerships and strong demand outlook for HPC instill confidence. The market cap suggests moderate stock price sensitivity, leading to a positive prediction.
GAAP revenues $50.6 million in 3Q '25, a 6% increase quarter-over-quarter from $47.6 million in 2Q '25. The increase was driven by the start of HPC lease revenue.
HPC lease revenue $7.2 million in 3Q '25, with intra-quarter lease commencement resulting in 22.5 megawatts of energized hosting capacity.
Bitcoin mined 377 Bitcoin in 3Q '25, a 22% decrease compared to 485 Bitcoin in 2Q '25. The decrease was due to operational changes.
GAAP cost of revenue $17.1 million in 3Q '25, a 22% decrease from $22.1 million in 2Q '25. The decrease was attributed to normalized power prices in Upstate New York.
Power prices $0.047 per kilowatt hour in 3Q '25, down from $0.05 per kilowatt hour in 2Q '25, reflecting normalization.
Proceeds from demand response programs $7.4 million in 3Q '25, up from $3.1 million in 2Q '25, due to increased participation.
Operating expenses $4.5 million in 3Q '25, a 28% increase from $3.5 million in 2Q '25, primarily due to increased staffing levels at Lake Mariner.
SG&A expense $16.7 million in 3Q '25, a 17% increase from $14.3 million in 2Q '25. After adjusting for stock-based compensation, SG&A increased to $12.3 million from $10.6 million.
Depreciation $26.5 million in 3Q '25, up from $18.8 million in 2Q '25. The increase included $7.8 million of accelerated depreciation related to certain assets.
Loss on disposals of property, plant, and equipment $2 million in 3Q '25, down from $3.8 million in 2Q '25, related to the sale of miners.
GAAP interest expense $9.8 million in 3Q '25, up from $4.0 million in 2Q '25.
Interest income $4.1 million in 3Q '25, up from $1.2 million in 2Q '25.
GAAP net loss $455 million in 3Q '25, compared to a net loss of $18.4 million in 2Q '25. The significant loss was related to changes in fair value of warrant and derivative liabilities.
Non-GAAP adjusted EBITDA $18.1 million in 3Q '25, a 25% improvement from $14.5 million in 2Q '25.
Cash and restricted cash $712.8 million as of September 30, 2025.
Total assets $2.5 billion as of September 30, 2025.
Total liabilities $2.2 billion as of September 30, 2025.
HPC Leasing Segment Revenues: The company recorded its first HPC revenues with lease commencement at WULF Den and CB-1, generating $7.2 million in revenue with 22.5 megawatts of energized hosting capacity.
New HPC Capacity Target: The company increased its annual target for new HPC signings from 100-150 megawatts to 250-500 megawatts per year, reflecting strong customer demand and pipeline progress.
Geographic Expansion: The company expanded its partnership with Fluidstack and Google to develop the Abernathy HPC campus in Texas, adding 168 megawatts of new HPC capacity with potential expansion up to 600 megawatts.
New Lease Agreement: Signed a 10-year agreement with Fluidstack, backed by Google, for 360 megawatts of IT load at the Lake Mariner campus, generating $670 million in annual revenue and $565 million in net operating income.
Construction Progress: Significant progress at Lake Mariner with CB-3 over 50% complete, CB-4 and CB-5 underway, and the structure for CB-3 expected to be fully enclosed by year-end.
Cost Management: Power costs normalized to $0.047 per kilowatt hour, and participation in demand response programs increased proceeds to $7.4 million in Q3 2025.
Long-Term Growth Strategy: Secured an 80-year lease at the Cayuga site in New York for high-power compute deployment starting in 2027, and expanded site acquisition and development teams to support growth.
Financial Milestone: Closed $3.2 billion in senior secured financing backed by Google to fund the Lake Mariner build-out, demonstrating a scalable development model.
Regulatory and Permitting Risks: The company’s expansion plans, including the Abernathy HPC campus and Cayuga site, depend on obtaining necessary permits and regulatory approvals. Any delays or denials could impact project timelines and financial outcomes.
Operational Execution Risks: The company is undertaking multiple large-scale projects simultaneously, such as the Lake Mariner and Abernathy campuses. Any delays, cost overruns, or construction issues could disrupt operations and financial performance.
Financial Risks: The company has taken on significant debt, including $3.2 billion in senior secured notes and $1.025 billion in convertible notes. High leverage increases vulnerability to interest rate changes and financial instability.
Customer Concentration Risk: The company’s revenue is heavily reliant on agreements with a few key customers, such as Fluidstack and Google. Any changes in these relationships could materially impact financial performance.
Market and Economic Risks: The company’s operations are sensitive to power prices and economic conditions. While power prices have normalized, any future volatility could increase costs and reduce profitability.
Technological and Competitive Risks: The company operates in a highly competitive and rapidly evolving industry. Failure to keep up with technological advancements or competitive pressures could erode market position.
Bitcoin Mining Revenue Decline: Revenue from Bitcoin mining has decreased by 22% quarter-over-quarter, which could impact overall financial performance if this trend continues.
Revenue Expectations: The company anticipates generating average annual revenue of approximately $670 million from a 10-year agreement with Fluidstack, backed by Google, at the Lake Mariner campus.
Operational Expansion: TeraWulf plans to deliver CB-2 near year-end, completing 60 megawatts of critical IT for Core42. Additionally, CB-3 is over 50% complete, with CB-4 and CB-5 construction underway.
Geographic Expansion: The company announced a joint venture with Fluidstack and Google to develop the Abernathy HPC campus in Texas, adding 168 megawatts of new HPC capacity with potential expansion up to 600 megawatts.
Future Growth Plans: TeraWulf increased its annual target for new HPC signings from 100-150 megawatts to 250-500 megawatts per year, reflecting strong customer demand and pipeline progress.
Long-Term Projects: The company signed an 80-year lease at the Cayuga site in New York, planning large-scale high-power compute deployment beginning in 2027.
Financial Position: TeraWulf closed $3.2 billion in senior secured financing backed by Google to fully fund the Lake Mariner build-out and raised over $5.2 billion in total financings in 2025.
The selected topic was not discussed during the call.
The earnings call summary and Q&A section reveal strong financial performance and optimistic guidance, particularly with the Fluidstack agreement and high margins. Despite some concerns about margins and project timelines, management's strategic partnerships and strong demand outlook for HPC instill confidence. The market cap suggests moderate stock price sensitivity, leading to a positive prediction.
The earnings call highlights a significant improvement in financial performance with a positive EBITDA turnaround, strategic partnerships with Google and Fluidstack, and a new share repurchase program. Despite some withheld details, the strategic partnerships and infrastructure expansion suggest growth potential. The market cap indicates moderate sensitivity to news, and the positive elements, such as the Google partnership and share repurchase, likely outweigh concerns, suggesting a positive stock price movement of 2% to 8%.
Despite some positive elements like the share repurchase program and potential long-term benefits from partnerships, the overall sentiment is negative due to the significant EPS miss, increased costs, and a substantial net loss. The Q&A revealed uncertainties and lack of clarity in management's responses, especially regarding cost savings and tenant sign-ups, which may increase investor concerns. The company's market cap suggests a moderate reaction, but the negative financial metrics and unclear guidance lead to a predicted stock price decline in the -2% to -8% range over the next two weeks.
The earnings call presents mixed signals. Financial performance shows increased operating expenses and a significant net loss, but Bitcoin mined increased. The Q&A revealed uncertainties about cost savings and contract milestones, but also confidence in operational efficiencies and demand. The strategic plan includes promising partnerships and expansions, with a new share repurchase program. Considering the small market cap, these factors suggest a neutral sentiment with potential for slight positive movement if strategic plans materialize effectively.
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