TeraWulf Q3 Loss Wider Than Expected, Revenues Increase Y/Y

Core Insights - TeraWulf Inc. reported a third-quarter 2025 adjusted loss of 7 cents per share, which was wider than the Zacks Consensus Estimate of a loss of 4 cents and 40% wider than the loss of 5 cents from the same quarter last year [1] - Revenues reached $50.6 million, marking an 87% year-over-year increase, although it fell short of the consensus estimate by 1.26% [1] - The increase in revenue was attributed to higher bitcoin output, expanded mining capacity, and the initiation of High-Performance Computing (HPC) lease revenues [1] Quarterly Financial Performance - Revenues for the third quarter increased by 87% year over year, driven by a higher average bitcoin price, expanded mining capacity, and the first-time recognition of HPC lease revenues [2] - Non-GAAP adjusted EBITDA was $18.1 million, a 203% increase compared to $6.0 million in the prior-year quarter [2] Segment Performance - Digital asset revenues in the third quarter were $43.4 million, up 60% year over year from $27.1 million in the third quarter of 2024, primarily due to expanded Bitcoin mining capacity and higher average Bitcoin prices [3] - The HPC segment generated its first reported revenues of $7.2 million in the third quarter, indicating a significant operational shift for the company [6] Mining Capacity and Operations - As of September 30, 2025, the Lake Mariner facility has energized 245 MW of Bitcoin-mining capacity, benefiting from low-carbon energy sources [4] - During the third quarter, TeraWulf's power costs averaged approximately 5 cents per kWh, with cost of revenues rising 17% year over year to $17.1 million [5] Strategic Partnerships and Expansion - TeraWulf formed the Abernathy Joint Venture in Texas, initially designed for 240 MW of capacity with potential expansion to 600 MW, backed by a $1.3 billion Google credit enhancement [11] - The company secured a 51% interest in a future 200 MW Fluidstack-led project, enhancing its long-term growth pipeline [12] Capital and Financing - TeraWulf completed over $5 billion in long-term financings to support its expansion, including a $1.0 billion offering of Convertible Notes and a $3.2 billion private offering of Senior Secured Notes [13][14] - The company ended the third quarter with cash and equivalents of $712.8 million, compared to $274.1 million at the end of 2024, with total outstanding debt around $1.5 billion [15] Future Guidance - TeraWulf reaffirmed its growth strategy targeting 250-500 MW of new contracted HPC capacity annually, with a focus on execution for growth beyond 2027 [16][17] - The company aims to have 200-250 MW of HPC capacity operational by year-end 2026, with phased delivery of the 450 MW Akela capacity scheduled through 2026 [18]