Q3 2024 Revenue of $27.1 million and Non-GAAP Adjusted EBITDA of $6.0 million.
Revenue growth of 42.8% year-over-year for the three-month period ended September 30, 2024.
Operational self-mining capacity as of September 30, 2024 increased 100% year-over-year to 10.0 EH/s.
Subsequent to Q3 2024, strategic activities included: (i) sale of Nautilus JV interest, (ii) new Lake Mariner ground lease, (iii) convertible note offering and (iv) share buyback.
EASTON, Md., Nov. 12, 2024 (GLOBE NEWSWIRE) -- TeraWulf Inc. (Nasdaq: WULF) ("TeraWulf” or the "Company”), a leading owner and operator of vertically integrated, next-generation digital infrastructure powered by predominantly zero-carbon energy, today announced its unaudited interim financial results for the third quarter of fiscal year 2024 and provided an operational update.
Third Quarter 2024 GAAP Operational and Financial Highlights
- Self-mined 442 bitcoin at the Lake Mariner Facility.
- Revenue increased to $27.1 million in Q3 2024 compared to $19.0 million in Q3 2023.
- Cost of revenue (exclusive of depreciation) increased to $14.7 million in Q3 2024 compared to $8.3 million in Q3 2023.
- Total self-mining hashrate capacity of 10.0 EH/s as of September 30, 2024, representing an increase of 100.0% relative to the same prior year period.
| Key GAAP Metrics ($ in thousands) | Three Months
Ended Q3 2024 | Three Months Ended Q3 2023 | % Change | |||||
| Revenue | $ | 27,059 | $ | 18,955 | 42.8 | % | ||
| Cost of revenue (exclusive of depreciation) | $ | 14,660 | $ | 8,268 | 77.3 | % | ||
| Cost of revenue as % of revenue | 54.2 | % | 43.6 | % | 24.3 | % | ||
- Self-mined 555 bitcoin across the Lake Mariner and Nautilus Cryptomine facilities, which represented a 43.4% decrease relative to in Q3 2023.
- Total value of bitcoin self-mined1 of $33.9 million in Q3 2024 compared to $27.6 million in Q3 2023.
- Power cost per bitcoin self-mined increased year-over-year, to $30,448 per bitcoin in Q3 2024 from $9,322 per bitcoin in Q3 2023, due to an approximate doubling in network difficulty and the bitcoin reward halving in April 2024.
- Adjusted EBITDA of $6.0 million in Q3 2024, an decrease of 33.6% from $9.0 million in Q3 2023.
| Key Non-GAAP Metrics2 | Three Months
Ended Q3 2024 | Three Months
Ended Q3 2023 | % Change | |||
| Bitcoin Self-Mined3 | 555 | 981 | (43.4 | ) % | ||
| Value per Bitcoin Self-Mined4 | $ | 61,075 | $ | 28,104 | 117.3 | % |
| Power Cost per Bitcoin Self-Mined5 | $ | 30,448 | $ | 9,322 | 226.6 | % |
| Avg. Operating Hash Rate (EH/s)6 | 8.1 | 5.0 | 62.0 | % | ||
- Completed sale of 25% equity interest in the Nautilus joint venture to its partner, a subsidiary of Talen Energy Corporation.
- Completed construction of 2.5 MW HPC hosting proof-of-concept project at Lake Mariner.
- Entered into new, long-term ground lease agreement at Lake Mariner extending both term and land area to support the Company's expansion into HPC hosting.
- Announced board of director approval for $200.0 million inaugural share repurchase program.
- Completed $500.0 million convertible notes offering and simultaneous repurchase of $115.0 million worth of TeraWulf shares.
1 Excludes BTC earned from profit sharing associated with a hosting agreement that expired in February 2024 at the Lake Mariner Facility and includes TeraWulf's net share of BTC produced at the Nautilus Cryptomine Facility.
2 The Company's share of the earnings or losses of operating results at the Nautilus Cryptomine Facility is reflected within "Equity in net income (loss) of investee, net of tax” in the condensed consolidated statements of operations. Accordingly, operating results of the Nautilus Cryptomine Facility are not reflected in revenue, cost of revenue or cost of operations lines in TeraWulf's condensed consolidated statements of operations. The Company uses these metrics as indicators of operational progress and effectiveness and believes they are useful to investors for the same purposes and to provide comparisons to peer companies. All figures except Bitcoin Self-Mined are estimates.
3 Excludes BTC earned from profit sharing associated with a hosting agreement that expired in February 2024 at the Lake Mariner Facility and TeraWulf's net share of BTC produced at the Nautilus Cryptomine Facility.
4 Computed as the weighted-average opening price of BTC on each respective day the Self-Mined Bitcoin is earned.
5 The Q3 2024 and Q3 2023 calculations excludes 0 and 14 bitcoin, respectively, earned via hosting profit share.
6 While nameplate inventory for TeraWulf's two facilities was 10.0 EH/s and 5.5 EH/s as of Q3 2024 and Q3 2023, respectively, actual monthly hash rate performance depends on a variety of factors, including (but not limited to) performance tuning to increase efficiency and maximize margin, scheduled outages (scopes to improve reliability or performance), unscheduled outages, curtailment due to participation in various cash generating demand response programs, derate of ASICS due to adverse weather and ASIC maintenance and repair. Average operating hash rate for Q3 2023 also includes hash rate related to a hosting agreement that expired in February 2024 at the Lake Mariner Facility.
Management Commentary
"The third quarter and the beginning of the fourth quarter marked a pivotal turning point for TeraWulf, as we delivered strong results across our strategic, financial, and operational objectives,” said Paul Prager, Chairman and CEO of TeraWulf. "The sale of our interest in the Nautilus joint venture not only generated a substantial return but also sharpened our focus on scaling high-performance computing at Lake Mariner. Securing an expanded ground lease with exclusive rights to 750 MW of infrastructure capacity is a significant milestone in our growth strategy. Combined with the success of our $500.0 million capital raise, we are exceptionally well-positioned to seize new opportunities in both Bitcoin mining and HPC hosting as we enter 2025.”
Prager continued, "We are excited about the surging demand for high-performance computing and the unique opportunity it presents for TeraWulf. Our power-ready energy assets offer a competitive advantage unmatched in the industry, providing a strong foundation as we scale our energy and digital infrastructure capabilities. We are focused on securing a customer contract by year-end, and remain dedicated to delivering outstanding value for our shareholders.”
Patrick Fleury, TeraWulf's CFO added, "We are fully funded to execute our growth plans through the first half of 2025. In October, we secured $500.0 million in convertible notes financing, using $60 million for a capped call to neutralize dilution up to a share price of $12.80. Simultaneously, we repurchased $115.0 million in common stock, resulting in no effective dilution until the stock exceeds $18.00 per share. This strategic move reinforces our commitment to shareholder value and positions us for strong growth ahead."
Operations Update
TeraWulf's current operational Bitcoin mining capacity includes approximately 195 MW at the Lake Mariner Facility. With the ongoing reinstallation of XP miners from Nautilus, the Company expects to increase its total self-mining hash rate to approximately 8.7 EH/s in the near term.
On the WULF Compute front, TeraWulf is actively expanding its HPC hosting infrastructure at Lake Mariner. Notable milestones include the successful completion of a 2.5 MW HPC proof-of-concept project, specifically designed to support both current and next-generation GPU technologies. The construction of CB-1, a 20 MW Tier 3-grade HPC hosting facility, is progressing on schedule and is expected to be completed by Q1 2025. Preparations for CB-2, a 50 MW HPC hosting facility, are also well advanced, with key components already secured, positioning the Company for a timely launch by the end of Q2 2025.
Third Quarter 2024 GAAP Financial Results
Revenue in the third quarter of 2024 increased 42.8% to $27.1 million as compared to $19.0 million in the third quarter of 2023. This increase is attributable to a significant growth in operating self-mining hash rate as well as a higher average bitcoin price relative to the third quarter of 2023. Notably, revenue and expenses reported in the TeraWulf GAAP income statement excludes revenue and expenses from the Nautilus joint venture; the net financial impact of the Nautilus joint venture is captured within equity in net income (loss) of investee, net of tax in the condensed consolidated statements of operations.
Cost of revenue (exclusive of depreciation) in the third quarter of 2024 increased 77.3% to $14.7 million compared to $8.3 million in the third quarter of 2023. Cost of revenue (exclusive of depreciation) as a percentage of revenue increased to 54.2% in the third quarter of 2024 compared to 43.6% in the third quarter of 2023, primarily due to an approximate doubling in network difficulty and the bitcoin reward halving in April 2024, partially offset by an 62.0% increase in average operating hash rate and 117.3% increase in average value per bitcoin self-mined year-over-year.
During the third quarter of 2024, the Company repaid $75.8 million of debt to fully pay down the remaining balance on its Term Loans ahead of maturity.
About TeraWulf
TeraWulf develops, owns, and operates environmentally sustainable, next-generation data center infrastructure in the United States, specifically designed for Bitcoin mining and high-performance computing. Led by a team of seasoned energy entrepreneurs, the Company owns and operates the Lake Mariner facility situated on the expansive site of a now retired coal plant in Western New York. Currently, TeraWulf generates revenue primarily through Bitcoin mining, leveraging predominantly zero-carbon energy sources, including hydroelectric and nuclear power. Committed to environmental, social, and governance (ESG) principles that align with its business objectives, TeraWulf aims to deliver industry-leading economics in mining and data center operations at an industrial scale.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the "safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements include statements concerning anticipated future events and expectations that are not historical facts. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements. In addition, forward-looking statements are typically identified by words such as "plan,” "believe,” "goal,” "target,” "aim,” "expect,” "anticipate,” "intend,” "outlook,” "estimate,” "forecast,” "project,” "continue,” "could,” "may,” "might,” "possible,” "potential,” "predict,” "should,” "would” and other similar words and expressions, although the absence of these words or expressions does not mean that a statement is not forward-looking. Forward-looking statements are based on the current expectations and beliefs of TeraWulf's management and are inherently subject to a number of factors, risks, uncertainties and assumptions and their potential effects. There can be no assurance that future developments will be those that have been anticipated. Actual results may vary materially from those expressed or implied by forward-looking statements based on a number of factors, risks, uncertainties and assumptions, including, among others: (1) conditions in the cryptocurrency mining industry, including fluctuation in the market pricing of bitcoin and other cryptocurrencies, and the economics of cryptocurrency mining, including as to variables or factors affecting the cost, efficiency and profitability of cryptocurrency mining; (2) competition among the various providers of cryptocurrency mining services; (3) changes in applicable laws, regulations and/or permits affecting TeraWulf's operations or the industries in which it operates, including regulation regarding power generation, cryptocurrency usage and/or cryptocurrency mining, and/or regulation regarding safety, health, environmental and other matters, which could require significant expenditures; (4) the ability to implement certain business objectives and to timely and cost-effectively execute integrated projects; (5) failure to obtain adequate financing on a timely basis and/or on acceptable terms with regard to growth strategies or operations; (6) loss of public confidence in bitcoin or other cryptocurrencies and the potential for cryptocurrency market manipulation; (7) adverse geopolitical or economic conditions, including a high inflationary environment; (8) the potential of cybercrime, money-laundering, malware infections and phishing and/or loss and interference as a result of equipment malfunction or break-down, physical disaster, data security breach, computer malfunction or sabotage (and the costs associated with any of the foregoing); (9) the availability, delivery schedule and cost of equipment necessary to maintain and grow the business and operations of TeraWulf, including mining equipment and infrastructure equipment meeting the technical or other specifications required to achieve its growth strategy; (10) employment workforce factors, including the loss of key employees; (11) litigation relating to TeraWulf and/or its business; and (12) other risks and uncertainties detailed from time to time in the Company's filings with the Securities and Exchange Commission ("SEC”). Potential investors, stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they were made. TeraWulf does not assume any obligation to publicly update any forward-looking statement after it was made, whether as a result of new information, future events or otherwise, except as required by law or regulation. Investors are referred to the full discussion of risks and uncertainties associated with forward-looking statements and the discussion of risk factors contained in the Company's filings with the SEC, which are available at www.sec.gov.
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CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2024 AND DECEMBER 31, 2023
(In thousands, except number of shares and par value; unaudited)
| September 30, 2024 | December 31, 2023 | ||||||
| ASSETS | |||||||
| CURRENT ASSETS: | |||||||
| Cash and cash equivalents | $ | 23,938 | $ | 54,439 | |||
| Digital currency | 297 | 1,801 | |||||
| Prepaid expenses | 3,091 | 4,540 | |||||
| Other receivables | 4,383 | 1,001 | |||||
| Other current assets | 706 | 806 | |||||
| Total current assets | 32,415 | 62,587 | |||||
| Equity in net assets of investee | 79,494 | 98,613 | |||||
| Property, plant and equipment, net | 283,098 | 205,284 | |||||
| Right-of-use asset | 10,188 | 10,943 | |||||
| Other assets | 710 | 679 | |||||
| TOTAL ASSETS | $ | 405,905 | $ | 378,106 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| CURRENT LIABILITIES: | |||||||
| Accounts payable | $ | 19,770 | $ | 15,169 | |||
| Accrued construction liabilities | 5,040 | 1,526 | |||||
| Other accrued liabilities | 7,080 | 9,179 | |||||
| Share based liabilities due to related party | - | 2,500 | |||||
| Other amounts due to related parties | 472 | 972 | |||||
| Current portion of operating lease liability | 53 | 48 | |||||
| Insurance premium financing payable | - | 1,803 | |||||
| Current portion of long-term debt | - | 123,465 | |||||
| Total current liabilities | 32,415 | 154,662 | |||||
| Operating lease liability, net of current portion | 859 | 899 | |||||
| Long-term debt | - | 56 | |||||
| TOTAL LIABILITIES | 33,274 | 155,617 | |||||
| Commitments and Contingencies (See Note 12) | |||||||
| STOCKHOLDERS' EQUITY: | |||||||
| Preferred stock, $0.001 par value, $100,000,000 authorized at September 30, 2024 and December 31, 2023; $9,566 issued and outstanding at September 30, 2024 and December 31, 2023; aggregate liquidation preference of $12,302 and $11,423 at September 30, 2024 and December 31, 2023, respectively | 9,273 | 9,273 | |||||
| Common stock, $0.001 par value, $600,000,000 and 400,000,000 authorized at September 30, 2024 and December 31, 2023, respectively; $382,632,083 and $276,733,329 issued and outstanding at September 30, 2024 and December 31, 2023, respectively | 383 | 277 | |||||
| Additional paid-in capital | 666,055 | 472,834 | |||||
| Accumulated deficit | (303,080 | ) | (259,895 | ) | |||
| Total stockholders' equity | 372,631 | 222,489 | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 405,905 | $ | 378,106 | |||
| Three Months EndedSeptember 30, | Nine Months EndedSeptember 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Revenue | $ | 27,059 | $ | 18,955 | $ | 105,066 | $ | 45,944 | |||||||
| Costs and expenses: | |||||||||||||||
| Cost of revenue (exclusive of depreciation shown below) | 14,660 | 8,268 | 42,986 | 18,383 | |||||||||||
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