TeraWulf (NASDAQ:WULF) reported higher third-quarter revenue as high-performance computing leases expanded, while executives outlined financing and construction plans for its data center projects in New York and Kentucky.
Revenue rose to $76.2 million from $44.8 million in the second quarter. HPC lease revenue nearly doubled to $63 million and accounted for approximately 83% of the total, Chief Financial Officer Patrick Fleury said on the earnings call.
Chairman and CEO Paul Prager said TeraWulf expects additional capacity at its Lake Mariner campus to begin generating revenue over the coming months. The company also is pursuing project-level debt financing for its Justified campus in Kentucky, where Google has agreed to provide credit support connected to a 20-year lease with Anthropic.
Lake Mariner capacity and revenue ramp
At Lake Mariner, the CB3 building is online and earning revenue under a lease with Fluidstack. Its lease commenced July 13, and third-quarter results reflected 102 megawatts of operating capacity generating lease revenue, Fleury said.
Chief Technology Officer Nazar Khan said the first two of four data halls in CB4 had tenant equipment deployed and energized, with commercial operation and rent commencement expected shortly. The remaining two halls were scheduled to come online during the fourth quarter.
Fleury said TeraWulf expects to exit the fourth quarter with an additional 168 megawatts online at CB4, followed by another 168 megawatts at CB5 by the end of the first quarter of 2027. Prager said the company expects to exit that quarter with approximately $700 million in annualized run-rate leasing revenue.
Fleury estimated total WULF Compute project costs at approximately $8.9 million per critical IT megawatt, within the company’s original $8 million to $10 million guidance range. Approximately $2.9 billion of project capital spending had been completed as of September 30, with about $1 billion remaining, he said.
Google support and Fluor agreement advance Justified
At the Justified campus in Hawesville, Kentucky, TeraWulf has an Anthropic lease representing approximately $19 billion of contracted revenue. Prager said the company has the equity required under its current plan and expects to fund the remaining capital requirement with project-level debt.
Fleury said Google’s support will protect against an Anthropic default after lease commencement through either a mandatory lease assumption or a debt-reducing termination payment. The cost of the support is recoverable from the tenant, and the support falls away if Anthropic achieves specified investment-grade credit ratings, he said.
TeraWulf also signed a definitive engineering, procurement and construction agreement with Fluor covering all three Justified data center buildings. Khan said the agreement includes cost and schedule protections, with guaranteed maximum pricing being established as engineering and procurement advance.
Construction pilings are underway, and the company continues to target phased ready-for-service deliveries from late 2027 through the second quarter of 2028. It expects costs of approximately $10 million to $12 million per critical IT megawatt.
During the question-and-answer session, Khan said Justified’s engineering and drawings were approximately 90% complete, with completion expected by December 1. He said the project was more than 80% complete on long-lead equipment and expected to reach 100% by year-end.
Muskie power plans and financing discipline
For its Muskie site in Kentucky, TeraWulf is working with Kentucky Power and AEP on a path to an initial gigawatt of electric service. Khan said the first 500 megawatts are scheduled to begin delivery in 2028 under an electric service agreement.
The next 500 megawatts requires new generation, Khan said. He said the companies plan to seek Kentucky regulatory approval for Kentucky Power’s proposed 760-megawatt Big Sandy combined-cycle gas plant, with approval expected by mid-2027. TeraWulf is working on the potential to bring portions of the second 500 megawatts forward into 2029, ahead of the plant’s anticipated 2031 delivery.
Prager said TeraWulf is in discussions with prospective Muskie customers but declined to predict when it might sign a lease. The company would not sign a deal that forces it to issue equity at a valuation management believes does not reflect TeraWulf’s value, he said.
Fleury said potential funding options include customer prepayments, customer equity investments, additional leverage and project-level investment in stabilized assets. He said TeraWulf intends to build and own assets long term but would consider investment in operating assets as a way to recycle capital.
Third-quarter results and liquidity
TeraWulf reported net income attributable to the company of $709.9 million, compared with a $939.9 million net loss in the second quarter. Fleury attributed the change primarily to a noncash fair-value adjustment associated with Google warrants and a gain on the sale of an equity interest in the Abernathy joint venture. Non-GAAP adjusted EBITDA was negative $12.8 million, compared with negative $18.3 million in the prior quarter.
Reported HPC leasing segment profit margin was approximately 17%, below the company’s long-term target of approximately 85%. Fleury said the reported figure included tenant fit-out, pre-revenue and development costs; after adjustments and excluding certain power costs, the margin was approximately 83%.
Cash and restricted cash totaled approximately $2.4 billion at September 30. Based on current plans and assumptions, Fleury said existing liquidity and expected Abernathy sale proceeds would fund remaining Lake Mariner commitments, the remaining Justified equity investment and interim Muskie letter-of-credit requirements without accessing equity capital markets.
About TeraWulf (NASDAQ:WULF)
TeraWulf Inc is a digital asset infrastructure company focused primarily on developing and operating environmentally conscious data centers for bitcoin mining and other high-performance computing applications. The company emphasizes the use of low-carbon energy, including nuclear and hydroelectric power, to support energy-intensive computing operations.
TeraWulf operates mining and data center facilities in the United States, including the Lake Mariner site in New York and the Nautilus Cryptomine facility in Pennsylvania.
