TeraWulf Inc. Q2 FY2025 earnings call

• Announced two major transactions: a 10-year 200-plus megawatt hyperscale AI hosting agreement with Fluidstack representing ~$3.7 billion in contracted revenue (potential to exceed $8.7 billion with lease extensions) and an 80-year ground lease with a purchase option for Cayuga to develop up to 400 megawatts of digital infrastructure.
• Core42 continues as an outstanding partner, WULF Den is fully operational, CB-1 begins generating revenue within the next week, and CB-2 is on track for Q4.
• Acquired Beowulf Electricity and Data in 2Q, streamlining structure and consolidating expertise in power generation with 94 employees transitioning to TeraWulf.
• Evaluated over 75 potential expansion sites in 2025, with a handful progressing through negotiations.

In the second quarter of 2025, TeraWulf's GAAP revenues were $47.6 million, up 38% quarter-over-quarter from $34.4 million in 1Q '25. Cost of revenue exclusive of depreciation decreased by 10% from $24.5 million in 1Q '25 to $22.1 million in 2Q '25. SG&A expense for 2Q '25 was $14.3 million, and after adjusting for stock-based compensation, SG&A decreased from $11.5 million in 1Q '25 to $10.7 million in 2Q '25. Non-GAAP adjusted EBITDA totaled $14.5 million in Q2, up from a negative $4.7 million in 1Q. The company self-mined 485 bitcoin at Lake Mariner, approximately 5 bitcoin per day, a 30% increase over 1Q '25.

• Expect mining operations to contribute positively to EBITDA in the second half of 2025.
• Adjusted annual SG&A guidance to $50 million to $55 million from $40 million to $45 million, reflecting accelerated growth in HPC business.
• Focus on financing the HPC build-out efficiently and in a shareholder-friendly manner, leveraging Google's $1.8 billion backstop and enhanced credit profile to pursue low-cost, scalable capital solutions.

Q: Talk about why Fluidstack is a good partner and the 30-day exclusivity A: Nazar Khan mentioned Fluidstack delivers compute clusters to large companies globally and having them as a tenant helps meet the goal of multiple customers. On exclusivity, there's a tight window for CB-5 discussions with similar terms to the signed deal.

Q: How was the $1.8 billion backstop from Google decided A: Patrick Fleury said the backstop amount is roughly 50% of payments over the lease term, declining over the 10-year term Q: Impact of Core42 and new deal on bitcoin mining electrical capacity A: Kerri Langlais noted Lake Mariner has near-term power available and Cayuga deal provides additional capacity for future needs Q: CapEx remaining for Core42 build-out A: Patrick Fleury said ~$200 million spent through Q2, total spend ~$430 million with back-ended spend like UPS Q: Difference in build-out and cost for Fluidstack vs Core42 A: Nazar Khan said factors include scale, time, and customized design for Fluidstack requiring more labor and different design considerations Q: How Google partnership changes discussions with future clients A: Paul Prager and Nazar Khan mentioned Google's partnership is novel, seen as an endorsement, and helps in attracting future clients due to the company's credibility Q: Financing for Core42 and Fluidstack A: Patrick Fleury said the Google partnership is a game changer for financing, allowing pursuit of most cost-effective and efficient capital structure Q: Google backstop for CB-5 if executed A: Patrick Fleury and Paul Prager said yes, Google would backstop it Q: Growth and future capacity expansion A: Nazar Khan said the 150-200 megawatt guidance is based on available capacity and financing ability, with potential to increase pace with the new transaction Q: EBITDA per megawatt difference between deal and Core42 A: Patrick Fleury explained the change in guidance due to multiple projects and focusing on net project operating income margin, with SG&A guidance factored in for EBITDA Q: Cayuga site deal details A: Kerri Langlais said Cayuga process was competitive with third-party bids, transaction done at a discount to third-party bids with equity structure to align stakeholders Q: Involvement of Google in Fluidstack negotiations A: Paul Prager said Google has been involved early in the Fluidstack effort, working closely with all parties Q: Early termination protections and warrants for CB-5 A: Paul Prager and Nazar Khan said terms are similar to the signed deal, with Google's backstop and equity participation likely part of CB-5 terms Q: Diversification of tenant base for Cayuga site A: Paul Prager said TeraWulf has significant interest from other quality customers and will continue to engage with them while focusing on current partnerships