TeraWulf (US:WULF)2024-03-20 00:24Financial Data and Key Metrics Changes - In Q4 2023, TeraWulf produced 971 Bitcoin, resulting in a total value of $34.8 million and an adjusted EBITDA of $16.4 million, with a total of 3,407 Bitcoin mined throughout 2023 [9][10][36] - GAAP revenues increased by 23% quarter-over-quarter, reaching $23.3 million in Q4 2023 from $19 million in Q3 2023, and year-over-year revenues increased by 361% from $15 million in 2022 to $69 million in 2023 [28] - The company reported a GAAP net loss of $10.8 million in Q4 2023, compared to a net loss of $19.4 million in Q3 2023, and a net loss of $74.5 million for the full year 2023, down from $91.6 million in 2022 [36] Business Line Data and Key Metrics Changes - TeraWulf mined 608 Bitcoin at Lake Mariner and 364 Bitcoin at Nautilus in Q4 2023, totaling 972 Bitcoin, which represents a 2% decline from the 994 Bitcoin mined in Q3 2023 [27] - The total power cost per Bitcoin mined was $10,178 in Q4 2023, compared to $9,322 in Q3 2023 [29] - Operating expenses increased slightly from $1.2 million in Q3 2023 to $1.7 million in Q4 2023, while SG&A expenses decreased from $10.3 million in Q3 2023 to $8.8 million in Q4 2023 [31][32] Market Data and Key Metrics Changes - The company anticipates achieving a 300-megawatt infrastructure capacity by the end of 2024 and plans to expand to 550 megawatts by 2025, which will result in approximately 28 exahash of mining capacity [13] - TeraWulf's cost to mine a Bitcoin is estimated at approximately $25,000 before the halving and $37,000 after the halving, positioning the company as one of the lowest-cost producers in the industry [18][40] Company Strategy and Development Direction - TeraWulf is focused on leveraging its low-cost infrastructure to maximize profits, repay debt, and return value to shareholders, with a commitment to achieving significant scalability and operational efficiency [12][17] - The company has established Wulf Compute as an internal innovation hub to explore additional revenue streams beyond Bitcoin mining, including high-performance computing and AI applications [14][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate free cash flow and reduce debt, with an anticipated debt paydown of approximately $30 million in early April [19][21] - The management team highlighted the importance of ESG factors in attracting hyperscaler clients and emphasized the unique position of TeraWulf's infrastructure in meeting growing demand [16][45] Other Important Information - TeraWulf repaid $40 million of principal in the last four months, bringing the debt balance to $106 million, with liquidity of almost $56 million as of the end of February [19] - The company executed a "monetize what we mine" strategy, liquidating Bitcoin to cover operational and capital expenses rather than diluting shareholders [38] Q&A Session Summary Question: What are the two assets that have the most value for the HPC initiative? - Management highlighted the importance of size, scale, and access to low-cost, zero-carbon power as key assets for the HPC initiative [43][44] Question: Any thoughts on the elevated short interest in the stock? - Management acknowledged the short interest and noted that a significant portion is related to lenders who will unwind their positions, potentially leading to a short squeeze opportunity [46][48] Question: Could the targeted capacity be utilized for HPC or cloud services? - Management confirmed that the infrastructure is flexible and can be utilized for both Bitcoin mining and HPC services, with a focus on maximizing returns [55][56] Question: What is the appetite for refinancing the term loan? - Management indicated that the focus is on eliminating debt rather than refinancing, given the strong cash flow generation [64] Question: Can you provide color on cash on hand and outstanding payments? - Management clarified that they have about $20 million in excess liquidity and no current liabilities for miners, with Building 4 at Lake Mariner substantially funded [66] Question: What financing options exist for HPC infrastructure? - Management explained that financing for HPC infrastructure is abundant for large-cap customers with long-term contracts, while smaller, capital-intensive projects are more complex to finance [71][73] Question: Why should investors choose TeraWulf over other crypto miners? - Management emphasized TeraWulf's low-cost production, strong alignment with shareholders, and scalability as key reasons for investment [84][87]