Terawulf Inc. ((WULF)) has held its Q1 earnings call. Read on for the main highlights of the call.
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TeraWulf Inc. recently held its first-quarter earnings call, revealing a mixed sentiment in its operational and financial performance. The company showcased significant progress in its High Power Compute business, achieving key milestones in energizing new facilities and securing additional capacity. However, financial challenges were evident, with increased costs and a negative EBITDA, highlighting the need for careful cost management and successful project financing to sustain growth.
Successful Energization of Miner Building 5
TeraWulf successfully energized Miner Building 5 at the Lake Mariner facility, increasing its total operational capacity to 245 megawatts. This achievement resulted in a self-mining hash rate of 12.2 exahash with fleet efficiency of 18 joules per terahash, marking a significant milestone in the company’s operational capabilities.
High Power Compute Hosting Platform Progress
The company’s WULF Compute’s liquid-cooled infrastructure is scaling to meet the growing demand for AI applications. The WULF Den is now operational and expected to generate revenue in the second quarter, with CB-1 and CB-2 set to go live in the third and fourth quarters, respectively.
Approval for Additional Capacity
TeraWulf received approval from NYISO for an additional 250 megawatts of capacity at Lake Mariner, bringing the total to 500 megawatts. The company plans to request an additional 250 megawatts to reach a total of 750 megawatts, demonstrating its commitment to expanding its operational capacity.
Positive Early Feedback on Project Financing
The company received positive early feedback from potential lenders for the 72.5 megawatt Core42 buildout. Execution is expected mid-year, with advisors JPMorgan and Morgan Stanley, indicating strong interest and confidence from financial institutions.
Negative EBITDA and Increased Costs
The first quarter of 2025 presented challenging market conditions for TeraWulf’s Bitcoin Mining operations, resulting in a negative EBITDA of $4.7 million, a decline from a positive $2.5 million in the previous quarter. This was primarily due to increased costs associated with the expansion of the High Power Compute hosting.
Bitcoin Mining Output Decrease
TeraWulf’s self-mining output decreased to 372 bitcoin in the first quarter of 2025, down 12% from 423 bitcoin in the previous quarter. GAAP revenues remained relatively flat at $34.4 million compared to $35 million in the fourth quarter of 2024.
Significant Power Cost Increase
The company experienced a 37% increase in realized power prices, impacting the cost of energy per bitcoin mined, which rose to $66,084 from $46,328. This increase in power costs significantly affected the company’s financial performance.
Higher SG&A Expenses
TeraWulf reported an increase in SG&A expenses from $32.3 million in the fourth quarter of 2024 to $50.1 million in the first quarter of 2025. This rise was primarily due to stock-based compensation, although adjusted SG&A expenses decreased from $15.5 million to $11.5 million.
Net Loss Increase
The company’s GAAP net loss increased to $61.4 million in the first quarter of 2025, compared to a net loss of $29.2 million in the previous quarter, reflecting the financial challenges faced during this period.
Forward-Looking Guidance
Looking ahead, TeraWulf provided guidance for the upcoming quarters, focusing on scaling their High Performance Compute platform and optimizing their self-mining operations. The company anticipates a decrease in power costs, estimating a cost of $47,500 per bitcoin mined for the remainder of 2025. Additionally, they plan to execute project financing for the Core42 buildout and lease additional HPC hosting capacity as key priorities.
In conclusion, TeraWulf’s first-quarter earnings call highlighted both achievements and challenges. While the company made significant strides in operational expansion, financial hurdles remain, necessitating strategic cost management and successful project financing to ensure sustainable growth. Investors and stakeholders will be keenly watching how TeraWulf navigates these challenges in the coming quarters.