TeraWulf Inc. Q2 FY26 Earnings Analysis

- HPC lease revenue is rapidly growing, increasing 117% from $9.7M in Q4 ’25 to $21M in Q1 ’26, with more data halls coming online driving further growth. - The revenue mix is shifting toward stable contracted HPC revenue as new buildings at Lake Mariner and other sites come online through 2026. - TeraWulf plans to deploy 250 to 500 megawatts of power-backed capacity annually, targeting steady and sustainable growth. - Expansion at new sites like Hawesville, Kentucky, with immediate power availability and large-scale potential supports future volume increases. - The transition from Bitcoin mining to HPC workloads is deliberate to focus on higher-value, long-duration compute infrastructure. - Continued scaling of HPC platform and new customer contracts indicate strong demand and upside potential over the next several years.

- HPC lease revenue is rapidly growing, reflected by a 117% increase to $21 million in Q1 2026, indicating strong future recurring revenue growth. - As additional buildings come online in 2Q to 4Q 2026 at Lake Mariner, HPC revenue mix will continue improving towards stable contracted income. - Segment profit margin for HPC leasing is expected to normalize around 85% long-term, with Q1 adjustments indicating underlying strong profitability. - Efforts to convert contracts into durable recurring cash flow are key to defining 2026 performance, signaling better earnings visibility. - Operating expenses have increased due to scaling but should normalize as operations stabilize. - The company targets adding 250 to 500 megawatts of capacity per year, supporting steady top-line and profit growth. - Transitioning from legacy Bitcoin mining towards higher-value HPC workloads will improve profitability and earnings quality.

- Approximately $3.2 to $3.5 million of operating expenses at WULF Compute initially classified under PP&E shifted from CapEx to OpEx during final bookkeeping; expected to normalize as operations scale. - No speculative capital deployment; capital is deployed only after contracts are secured, focusing on contracted or actively commercializing assets. - $3.1 billion of cash and restricted cash on balance sheet as of quarter-end, fueling funded development pipeline. - Plans to add battery storage capacity, efficient gas-fired generation, and load incrementally at Maryland site alongside existing 210 MW peaker plant. - Awaiting FERC approval for Maryland; once approved, focus will be on generation compliance and potentially building a larger gas facility—capital deployment contingent on regulatory green light. - Incremental 250 MW interconnect at Lake Mariner pending midyear ISO feedback, influencing availability and marketing of new capacity. - Strategy emphasizes disciplined capital deployment aligned with long-term cash flows and credit-backed counterparties.

- As of March 31, 2026, TeraWulf parent entity held approximately $300 million of available unrestricted cash, which increased to about $1.5 billion after April equity raises. - WULF Compute had $2.8 billion gross cash with $1.5 billion CapEx spent and $2.2 billion remaining. - Abernathy JV had $1.4 billion gross cash with $0.4 billion CapEx spent and $0.9 billion remaining. - Subsequent to the quarter, the company repaid a $100 million draw on the bridge credit facility and terminated it. - Approximately $1.2 billion of equity raised year-to-date is expected to fund the Kentucky project equity contribution. - Management emphasizes aiming for flexible debt structures with potential to transition to investment-grade financing as projects mature. - Overall, liquidity remains strong with no immediate new fundraising publicly announced but ongoing capital raises earlier in 2026 support project development.

- The company is actively engaged with multiple high-quality customers, typically 6 to 8 key clients, seeking alignment on site availability and timing. - They have guided the market to expect 250 to 500 megawatts of capacity deliveries annually, which aligns well with current customer demand. - Ongoing discussions with clients involve both prompt power availability and strategic footprint expansion across zones rather than single sites. - At Maryland, there is significant interest due to the site's scale and location, though major development awaits FERC approval. - The Lake Mariner site anticipates feedback midyear regarding an incremental 250-megawatt interconnect to expand capacity. - The Kentucky site is progressing with interest from a likely investment-grade customer after a competitive process. - Overall, the orderbook reflects strong demand and multiple ongoing negotiations, with a focus on securing alignment on contract terms and project timing.