Business Context and Reporting Period
Company: TeraWulf Inc. (WULF)
Filing Type: Form 10-Q (Unaudited)
Period Ended: June 30, 2026
Business Overview: TeraWulf is a vertically integrated owner and operator of digital infrastructure, transitioning from a primary focus on Bitcoin mining to High-Performance Computing (HPC) data center leasing. The company operates the Lake Mariner Data Campus in New York and has acquired sites in Kentucky (Justified and Muskie Data Campuses) to support AI and HPC workloads.
Key Financial Metrics (Six Months Ended June 30, 2026)
| Metric | Value (in thousands) |
|---|---|
| Total Revenue | $78,779 |
| HPC Lease Revenue | $52,954 |
| Digital Asset (Mining) Revenue | $25,825 |
| Net Loss | $(1,368,530) |
| Net Loss Attributable to TeraWulf | $(1,367,551) |
| Loss Per Share (Basic & Diluted) | $(3.01) |
| Cash and Cash Equivalents | $2,619,191 |
| Total Restricted Cash | $409,417 |
| Total Debt (Current + Long-Term) | $4,212,031 |
| Working Capital | $(957,367) |
Material Changes vs. Prior Period
- Revenue Mix Shift: HPC lease revenue now constitutes 67% of total revenue ($52.9M), compared to 0% in the prior year. Conversely, digital asset revenue declined 68% to $25.8M due to the strategic curtailment of mining operations to repurpose infrastructure for HPC.
- Net Loss Expansion: Net loss increased significantly to $1.37B from $79.8M in the prior year. This is primarily driven by a $972M non-cash loss on the change in fair value of warrant liabilities (Google Warrants) and increased operating expenses related to HPC expansion.
- Operating Expenses: Selling, general, and administrative (SG&A) expenses surged to $240.0M (from $56.6M), largely due to a $145.4M increase in stock-based compensation and a $14.4M charitable contribution in stock.
- Capital Expenditures: Cash used in investing activities jumped to $1.61B (from $132.1M), driven by $1.38B in purchases of plant and equipment and $231.4M for asset acquisitions (Justified and Muskie campuses).
- Debt Structure: The company issued $3.2B in 2030 Secured Notes and various convertible notes in 2025, leading to a substantial increase in interest expense ($123.5M vs $8.1M).
Guidance, Outlook, and Risks
- Strategic Outlook: Management expects revenue to increasingly shift toward HPC leasing as contracted capacity is delivered. The company is curtailment legacy mining where it conflicts with HPC development.
- Recent Developments:
- Sold 50.1% equity interest in the Abernathy Joint Venture for approximately $530M in cash (July 2026).
- Secured a long-term lease with Anthropic for 401 MW of critical IT load at the Justified Data Campus (July 2026).
- FERC authorized the acquisition of the Morgantown generating station (July 2026).
- Risks and Contingencies:
- Regulatory: New York State's temporary moratorium on data center permitting could delay the Cayuga Site development.
- Market: Exposure to Bitcoin price volatility and energy price fluctuations, though HPC contracts mitigate some revenue risk.
- Liquidity: Significant capital requirements for HPC buildouts; reliance on equity issuances and project financing.
- Warrant Liability: Significant volatility in net income due to the fair value accounting of Google Warrants issued as credit support.
Investor Verification Checklist
- Warrant Liability Impact: Verify the magnitude of the $972M non-cash loss on warrant fair value and its impact on GAAP net loss versus Adjusted EBITDA.
- HPC Lease Commencement: Confirm the timeline for the remaining Fluidstack and Anthropic lease commencements to validate future revenue recognition.
- Capital Deployment: Review the $1.6B in investing cash outflows to ensure alignment with the phased buildout of the Justified and Muskie campuses.
- Debt Covenants: Assess compliance with the minimum liquidity covenant under the new Revolving Credit Facility and the impact of the $3.2B Secured Notes.
- Regulatory Status: Monitor the status of the New York State moratorium and its potential impact on the Cayuga Site timeline.