Sharp Ramp in HPC Leasing Revenue
HPC leasing contributed $21.0M in Q1, the first meaningful quarter of HPC leasing revenue, up 117% from $9.7M in Q4 2025, signaling early conversion to stable, contracted revenue.
TeraWulf Inc
· WULF
May 8th, 2026
Summary
- Earnings Call Date:
- 2026-05-08
- Change Since:
- +15.31%
- Next Earnings Date:
- 2026-08-17
Earnings Call Sentiment
PositiveThe call highlights a clear operational transition from Bitcoin mining toward contracted HPC leasing with strong early execution: energized capacity at Lake Mariner, a 117% QoQ increase in HPC revenue, meaningful liquidity ($3.1B cash/restricted cash), an improved adjusted EBITDA trajectory and an adjusted HPC segment margin consistent with long-term guidance (~85%). Offsetting these positives are sizable GAAP losses driven by noncash warrant fair value volatility ($216.3M), impairment charges ($25.7M), higher headline SG&A and transitional mining revenue declines. Most of the headline negatives are noncash or transitional while core operating metrics and liquidity are demonstrably strengthening, supporting constructive execution and growth outlook.
Company Guidance
The company guided that execution and capacity delivery remain the focus, targeting 480 MW online in H2 2027 and expecting a FERC decision on the Morgantown acquisition in mid‑summer; they noted CB‑3 scope completion by end of May with CB‑4 and CB‑5 on track for 3Q and 4Q 2026 and an incremental 250 MW interconnect update from the ISO due midyear. Liquidity and funding posture: $3.1 billion of cash and restricted cash at 3/31/26 (parent ~ $300 million unrestricted, rising to ~ $1.5 billion after April equity), WULF Compute ~ $2.8 billion gross cash ($2.3B net) with $1.5B CapEx spent and $2.2B remaining, Abernathy JV ~$1.4B gross ($1.0B net) with $0.4B CapEx spent and $0.9B remaining, repayment/termination of a $100M bridge draw, and roughly $1.2B of equity raised year‑to‑date earmarked in part for Kentucky. Financial and operating metrics/guidance highlighted Q1 revenue of $34M (Digital Assets ~$13M; HPC leasing $21M, +117% QoQ), 60 MW of critical IT energized at Lake Mariner contributing $21M of lease revenue, cost of revenue excl. depreciation down 88% QoQ to $2.4M, demand response proceeds $14.1M, adjusted EBITDA of negative $4.1M (improved from -$50.9M), GAAP net loss $427.6M (including a $216.3M noncash warrant loss), SG&A 2026 target $75–100M, and long‑term HPC segment profit margin target of ~85% (versus an as‑reported ~50% in Q1 after one‑time items).
Operational Milestones at Lake Mariner
60 MW of critical IT capacity at Lake Mariner energized and generating revenue as of March 31; CB-2 achieved RFS and Core42 lease commenced. CB-3 on track to complete scope by end of May; CB-4 and CB-5 remain on schedule for 3Q and 4Q 2026.
Large Liquidity & Funded Development Pipeline
Cash and restricted cash totaled $3.1B at quarter end; parent unrestricted cash ~ $300M (increased to ~ $1.5B after April equity raise). WULF Compute had ~$2.8B gross cash ($2.3B net) with $1.5B CapEx spent and $2.2B remaining, and Abernathy JV had ~$1.4B gross ($1.0B net).
Material Reduction in Cost of Revenue and Strong Demand Response
Cost of revenue (ex-depreciation) fell 88% QoQ from $18.9M to $2.4M. Demand response proceeds increased to $14.1M from $4.4M, a ~220% increase, which materially reduced reported cost of revenue.
Improved Adjusted EBITDA
Non-GAAP adjusted EBITDA improved to a negative $4.1M in Q1 from negative $50.9M in Q4, demonstrating meaningful operational improvement during the transition to HPC leasing.
HPC Segment Profitability (Adjusted)
As-reported HPC segment margin was ~50% in Q1, but after adjusting for $2.1M tenant fit-out revenue/costs, $3.5M pre-revenue WULF Compute costs and $2.1M development costs, the adjusted segment profit margin is approximately 85%, in line with long-term guidance.
Strategic Site Additions and Pipeline Progress
Added Hawesville, KY (immediate power availability) and progressing Morgantown, MD acquisition (FERC decision expected mid-summer). Management is targeting 480 MW online in H2 2027 and guiding a development cadence of ~250–500 MW per year.
Discipline on Capital Deployment
Management reiterated capital discipline: $3.1B of cash/restricted cash is being deployed into contracted or actively commercializing assets and the company repaid and terminated a $100M bridge draw post-quarter.
Operator
Greetings, and welcome to the TeraWulf 2026 First Quarter Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, John Larkin, Senior Vice President, Director of Investor Relations. Thank you. You may begin.
John Larkin
Thank you, operator. Good morning, and welcome to TeraWulf's First Quarter 2026 Earnings Call. Joining me today are Chairman and CEO, Paul Prager; CTO, Nazar Khan; and CFO, Patrick Fleury. Before we begin, please note that our remarks today may include forward-looking statements. These statements are subject to risks and uncertainties, and actual results may differ materially. Words such as anticipate, expect, believe, intend, estimate, project, could, should, will and similar expressions are intended to identify forward-looking statements. For a discussion of these risks, please refer to our filings with the SEC available at sec.gov and in the Investor Relations section of our website. We will also reference certain non-GAAP financial measures.
Reconciliations to the most comparable GAAP measures are available in our earnings release and filings. With that, I'll turn the call over to our Chairman and CEO, Paul Prager.
Paul Prager
Thanks, John, and good morning, everyone. The first quarter of 2026 was about execution. We exited 2025 with an established platform, including sites, contracts, capital and strategy. And what you are seeing in Q1 is the early conversion of that foundation into operating performance and recurring revenue. That strategy continues to guide everything we do, controlling energy adva...
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