TeraWulf (WULF)2024-11-13 04:05Financial Data and Key Metrics - GAAP revenues decreased 24% QoQ to 35.6 million in Q2 2024 [19] - The company self-mined 442 Bitcoin at Lake Merida and had a net share of 113 Bitcoin from Nautilus, totaling 555 Bitcoin, a 21% decrease from 699 Bitcoin in Q2 2024 [19] - The average power cost per Bitcoin mined was 22,954 in Q2 2024 [22] - GAAP net loss attributable to common shareholders was 11.2 million in Q2 2024 [26] - Non-GAAP adjusted EBITDA was 19.5 million in Q2 2024 [26] - The company held 405 million and total liabilities of 92 million, achieving a 3.4x return on investment [9] - A new long-term ground lease at Lake Mariner increased total acreage by nearly 50%, from 107 acres to 157 acres, with exclusive rights to up to 750 megawatts of infrastructure capacity [10] - The company raised 200 million stock buyback program was approved, with 54,000 per Bitcoin in Q3 2024, among the industry's lowest [13] - The company ordered the latest Bitmain S21 Pro miners, expected to arrive by early Q1 2025, to boost mining efficiency [14] Market Data and Key Metrics - The company completed construction of a 2.5-megawatt proof-of-concept project in Q3 2024, with 20-megawatt CB-1 and 50-megawatt CB-2 data centers on schedule for Q1 and Q2 2025, respectively [15] - Advanced discussions with potential tenants for HPC hosting are ongoing, with the first HPC hosting partner expected to be announced before the end of 2024 [15] - The company is focusing on regions with abundant, low-cost, zero-carbon power, leveraging its Lake Merida facility's direct grid connection and robust energy infrastructure [16][17] Company Strategy and Industry Competition - The company is doubling down on its core strategy of leveraging low-cost, sustainable energy and operational excellence to thrive in the high-speed compute market [8][16] - Regulatory shifts around data centers at nuclear power plants have highlighted the challenges of securing large-scale carbon-free power, positioning the company's Lake Merida facility as a unique asset [17] - The company is targeting high-power compute customer contracts with one-year revenue prepays and expects to execute project financing for approximately 70% of the total project cost [30] Management Commentary on Operating Environment and Future Outlook - The company is confident in its approach, seeing the industry increasingly align with its core strengths of low-cost, sustainable energy and operational excellence [8] - The recent FERC ruling has intensified the scramble for power, with sites like Lake Mariner gaining more attention due to their access to power, land, and water [44][45] - The company expects to announce its first HPC hosting partner before the end of 2024 and is prepared to expand capacity with the right customer and contract terms [38][41] Other Important Information - The company incurred a loss of 0.8 million in Q2 2024, reflecting its proportional share of the Nautilus joint venture's net loss [25] - The company expects to achieve a marginal cost of production of approximately 47,000 in Q1 2025 [27] - Planned outages at Lake Mariner in mid-November 2024 will impact approximately 5.2 exahash of mining capacity for one week as the company connects ultra-high-voltage redundant power feeds [28] Q&A Session Summary Question: Capital expenditure details for CB-1 and CB-2 - The build cost for CB-1 is approximately 5 million per megawatt, while CB-2 is estimated at 5.5 million per megawatt [35][36] Question: First HPC customer and contract structure - The company expects to announce one or two customers for the initial 72.5 megawatts of capacity before year-end, with advanced negotiations ongoing [38][41] Question: Demand environment and pricing trends - Pricing per kilowatt hour has increased marginally, with more parties prepared to meet the company's terms, particularly after the FERC ruling [43][44] Question: Project financing for HPC - The company feels confident about its ability to secure project financing without additional equity, leveraging one-year revenue prepays and existing infrastructure [46][50] Question: Future expansion and capital allocation - The company plans to provide 2025 guidance in February and will adjust expansion plans based on customer demand and market conditions [54][55] Question: Feedback on WULF Den proof of concept - Potential customers have visited the site and provided positive feedback, with discussions focusing on cooling solutions and operational details [76] Question: Regulatory environment and industry outlook - The company anticipates a cleaner regulatory environment under the new administration, which could facilitate faster project approvals and reduce operating burdens [79][80] Question: Redundant power and miner sales - Redundant power will primarily focus on HPC hosting buildings, with Bitcoin mining facilities requiring less redundancy [87][88] - The company sold the majority of miners from Nautilus for $10.5 million and is upgrading its fleet for greater efficiency [89] Question: Long-term demand for power capacity - The company sees significant growth in data center demand, driven by high-speed compute workloads, and is well-positioned to meet this demand with its existing infrastructure [93][94]