TERAWULF INC. Q1 FY2025 earnings call

Management Statement and Operational Highlights

• Bitcoin Mining: Energized Miner Building 5, reaching total operational capacity of 245 MW. Power prices normalized in March/April, leading to positive EBITDA in April. Received and installed all S21 Pro miners before potential tariff implications.
• HPC Hosting: WULF Den is operational, CB-1 to go live in Q3, CB-2 in Q4. Close collaboration with Core42 on technical specifications and deployment timelines. Pursuing project financing for the 72.5 MW Core42 buildout, scheduled to launch next week with advisors JPMorgan and Morgan Stanley. Evaluating Cayuga Site and other expansion opportunities at Lake Mariner, with approval for an additional 250 MW capacity, aiming for 750 MW total.
• Other Updates: Tariffs may impact build costs by 5%-10%, but the company remains committed to mid-teens unlevered returns. Project financing for Core42 buildout is on track for mid-year execution.

Segment Performance

• Bitcoin Mining (WULF Mining): In 1Q 2025, self-mined 372 bitcoins, with a self-mining hash rate of 12.2 exahash and fleet efficiency of 18 joules per terahash. GAAP revenues were flat quarter-over-quarter at $34.4 million. GAAP cost of revenue was $24.5 million, a 25% increase QoQ, due to a 37% increase in realized power prices. Total operational capacity at Lake Mariner is 245 MW, with approval for an additional 250 MW, bringing total to 500 MW, and aiming for 750 MW. Power prices normalized in March/April, and mining operations returned to positive EBITDA in April.
• High Performance Compute (WULF Compute): WULF Den is operational and will generate revenues in Q2. CB-1 is expected to go live in Q3 and CB-2 in Q4. Collaboration with Core42 is progressing, with Dell expecting over 180 personnel on site for GPU tuning. The WULF Den is operational, and Core42 partnership is advancing with close collaboration on technical specs and timelines.

Guidance

• Power pricing guidance for 2Q-4Q 2025 is $0.05 per kilowatt hour, in line with New York ISO Zone A forward power curve.
• Anticipated BTC segment cost of production for 2Q-4Q 2025 is well below 1Q's $72,000, at approximately $47,500.
• Project financing for the 72.5 MW Core42 buildout is scheduled to launch next week with advisors JPMorgan and Morgan Stanley.

Risks

• Temporary spike in power prices in January-February 2025, which was a historic 1.76 standard deviation event, impacting EBITDA.
• Tariff landscape could impact build costs by 5%-10%.
• Uncertainty in timing and costs of infrastructure refinements for HPC, which could accelerate or delay timelines and affect overall infrastructure costs.

Question and Answer

Q: Integration of TeraWulf and Beowulf, timeline and cost savings?

A: The process is rigorous with independent directors, hired independent counsel and financial advisors, and is expected to benefit long-term. It's near-term but dependent on independent directors' approval.

Q: Tariff impact on build costs for Cayuga or other sites?

A: Tariffs could impact by 5%-10%, but within guidance range of $6M-$8M per megawatt.

Q: Outlook for Bitcoin mining in face of elevated global hash rates?

A: Can't combat hash rate directly, but focused on low-cost generation. Higher Bitcoin prices benefit miners, and the company's fleet is efficient.

Q: Project financing for HPC and its impact on client prospecting?

A: Project financing is critical, with high confidence in executing it at good terms. It will enable recycling cash to build additional facilities and help in client prospecting as it shows execution capability.