Earnings call transcript Q2 2023

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Operator

Ladies and gentlemen, good morning and welcome to the TeraWulf Inc.

Second Quarter 2023 Earnings Conference Call.

At this time, all participants are in the listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator instructions]

pleasure Communications. your my Director Jason now Corporate of is to host introduce Assad, It ahead, go Please Mr. Harrison.

Jason Assad

for for operator. Patrick to today's Paul XXXX you Prager TeraWulf's you, call second us Thank Good Chief Chief quarter earnings morning, are Chairman and call. Executive me our call. Fleury. With our and and welcome joining on today Officer Thank Officer; Financial

risk intend, I'd prepared estimate, results which cause question-and-answer expect, as statements started, forward-looking all anticipated by are get statements enable, like uncertainties could, to remarks are differ involve believe, uncertainties TeraWulf and similar contain we everyone will, statement. forward-looking our that to and actual to project subject we Before that as session. anticipate, may materially that words results materially. relate Investors uncertainties statements, the this may forward-looking subject they actual additional such should, this statements from time. may expressions forward-looking may and at those to risk TeraWulf and used remind When differ and to risk are and These a make cautioned forward-looking potential, the during are call, which in

of public section risks our fully other in viewed corporate be are Exchange at In addition, Permission, may Investor the described website filings in more U.S. TeraWulf's with which and and Securities at the www.therawolf.com. www.scc.gov

Prager. today's of to to the will from website and company's Finally, comparable our my to and non-GAAP Q&A. most note full Patrick, and to periodic Paul GAAP XX-K please performance then Paul? turn Form refer begin measures. call prepared with remarks proceed a certain the Paul over CEO, now on to XX-Q Please for It's non-GAAP pleasure TeraWulf's on we'll we call, to reconciliation reports today's call financial measures. financial measures We'll refer our that these to

Paul Prager

we quarter for our would to that XXXX quite accomplished like Thank last us a and review earnings you, our ago the rapid key promised, joining lot year half as power I everyone. We successfully exahash achieved second executed We've few first Jason, good of and a launched morning since XXXX. end XXX and milestones on X.X during a you Thank of call. call, just by achieved TeraWulf we've plans. and, formal a over capacity QX of megawatts half growth One, the XXXX. our and

past at we March, an Nautilus jointly-owned, XX This at our began zero-carbon X megawatts. our megawatts nuclear-powered we mining completed Mariner of XXX% Building Lake facility, deployment June, in And energization capacity the XX housing and of facility. additional

is miner peers perseverance, as exceed most TeraWulf team, efficiency To an impressive. to on metrics period per and one the more of Two, the the continue and of folks our excellence, scale, ground. accomplishments remain confident of abbreviated professionalism sector we time of efficient exahash testament the such our will even and we assembled our the in to in especially fleets price and prove the

establish SXXj the of fleets Wulf involving the an Our bitcoin terahash. recently mining the efficiency joules will XX.X one announced further only of latest in as plan miners generation at XX,XXX of efficient most per expansion XP sector

preeminent and to teams to as will assured Wulf differentiate operations development rest should continue the You our work miner.

Three, and we the are setting financial for transparency. operational standard

from transparency, and setting hope partner, miners. the with significantly By metrics. former financial on reporting raised Our him other our lender, has He bar a investor us standard a for the XX-year hear Fleury, will Patrick CFO, confidently evaluate we and investors operational moment. the alongside in you the will industry financial

of Assad on respected to recognize Investors fortunate members the welcome communications. our their Jason April, In as increased pivot XX-year communications by upon and were to one that him team. investor addition, implementing Holdings regular Four, we've Thanks Digital comprehensive a enhanced greatly we updates, investor enhanced our a bitcoin may strategy of first communications veteran includes board, team this transparency, our into mining. have Marathon to engagement advanced new initial we opportunities.

released investors our an continues unquestionably underscore our highlighting from would site accomplishments our we In some apart virtual look TeraWulf tour to XXXX, facilities in in After a mining to remarkable June, we've peers. state-of-the-art of team. far set addition, so providing at like operations what our and inside believe I

we assets. First, best have the

unmatched facilities class energy in are grid Our In costs, mining expansion are to surrounding everything, where the arguably and well-developed and location in robust, we the facilities our able located with climate, communities. are markets ideal power the in the capability. and best industry markets, significant is service

As a what we positioned increasingly believe peers regulatory relative strategically zero-carbon in miner, environment. an be to our will we stringent are

Second, we have energy advantage. the

has experienced all infrastructure at been procuring team working in the energy, is we for are in Our sector energy Bitcoin and together energy about both at and decades. scale. term low-cost

a and New into is Bitcoin in cost Nautilus at lowest translates if in the upstate power low-cost Our that abundant sector. York, power not per among, two-cent the power

discloses Bitcoin and cost We you will reports, metric. a monthly unrivaled miners are operations only of each our check month in production power one this our and true that few if find you us

mining, size have it we expansion to organic capability. matters. Third, comes When Bitcoin

warehouses import and as grow. to is from layout of element, sites potential to capacity two everything developed our were Our our power a designed with key expansion the

another entry. process Nautilus time cost barrier our to The now We and the and megawatts. vital, of both. adaptability these expanding and are facilities replicate our Lake Mariner a are substantial facilities Lake and significant Mariner in XX to Scalability have and is facility represent by

with Fourth, we investors. our uniquely aligned are

As matter? stock, its in the shareholders. we if are the own of In be our have investor, over will invested the last interest yours. a personally you approximately in does dilute my only and my $XX TeraWulf year, best XX% of with shareholder goals and the and company money, million of shares. the only bet Because alignment I collectively, myself complete accretive can own in company's this significant ever Why insiders it that and very

In boundaries possible is you short, shareholders. if on existing responsible Every for this and in a integrated remain advancing point at our win. mining financially vertically forward only our what about move opportunities from strategic our manner. of while sites We is win business pushing scaling opportunistically laser-focused and our mission pursuing we operations the

Importantly, we in that believe a not all upcoming is guard. lead to halving created April to the is Exahash and the that likely changing of equal

advantage diverse an team experience both management of acknowledged years managing is developing TeraWulf we illuminated and by ourselves positioned fundamental We what and some look to in peers of have infrastructure. XX-plus may profitability forward happen are expect of taking as We investors. with flaws the now our for of accomplished and led by post-halving. energy

for out together Our has will continue to focused shareholder the on build pay management side core we been it experience last team squarely working XX-plus believe this with I years. as and perspective paying unique one dividends side another our is building by that and and is operations, value.

in mining As a fellow want as for with you and a success, company. thank our interest building support trust your collective shareholder we material invaluable to the leading on I focus

a Patrick I review. over for our more CFO, to financial will hand call now detailed the Patrick? Fleury,

Patrick Fleury

Thank you, Paul.

QX liquidity, beginning this As first demonstrate quarter-over-quarter. we're has reflected in financials. forward. well a production increase TeraWulf this These exceptionally positive of steady flow, seen free Paul in call, enhanced a Notably, operational and continued the half in year-over-year growth year, our both positive in our resulting in XXXX, to highlighted sustaining showcasing consistent QX upward trend revenue, performed in results moving cash committed and outcomes of momentum the

investor our GAAP difference reminder, between there key guidance a presentation. and reports operating financials our very July is quick in A monthly the and presented

a the tax the of result XX% financial Nautilus statements. is As consolidated venture in impact in joint ownership income our depreciation of Nautilus, line item our not GAAP into equity expenses, net amortization of at the Instead, investee on reflected net statement. the revenue, the revenue, and GAAP of cost loss operating financial and of Nautilus are

Diving year. numbers Nautilus per of XXX at mined total our at day, in of for XXX quarter second Mariner, of or and this Bitcoins QX for nearly net about Lake XXX Bitcoin Bitcoin XXX into of of our we was Bitcoin share XX XXXX, Bitcoins Bitcoin double the mined the production a

same revenues revenue hosting notable reaching from year, to outstanding Our X,XXX% last an over the a rise. saw million, our growth and compared saw also XX.XX of period

revenue for revenue Bitcoin XX,XXX reports self-mining monthly our in press equivalent defined quarter and detailed this a Our operating release. averaged as of per XX.X and million,

in at our from gross second gross now Looking an increase margin to of well last to over X,XXX% our profit, increase compared profit we XX%. $XX.X an as quarter, to XX% as saw year's million

power. Our the can contribution to XQ in per this X,XXX decrease be XQ of in X,XXX cost was a to Bitcoin fixed approximately XQ total of Nautilus's approximately $X.XX power full of approximately XX% that mine year, attributed compared

we power power an we Lake to X.X average fees these fully transmission taxes, million. confident $X.X and facility power at do costs note, our despite power the seasonal or float to Operating subjectivity of Unlike lower, will costs. achieve at want I are facility, include that expenses approximately per are fluctuations. cents and Nautilus, stable kilowatt price cost loaded where capacity costs annual year-over-year remain hour Mariner

This in expenses, in expenses primarily increases $X.X and by decreases million and compensation employee of in $XXX,XXX million due increase SG&A of respectively. million compensation increased to benefits, and million year-over-year $X.X insurance fees was offset $X.X respectively, stock-based in $X.X $X.X and and XQ'XX XQ'XX. from to million legal

$XX million. about to page about $XX actual to $XX reflects $XX savings continue million We of over our SG&A of million compared XX SG&A cost in Investor of per to expect latest to Presentation, XXXX's which XXXX of realize million

for of XXXX Depreciation was mining the and for and XX, constructed and increase to expense and and XXXX XXXX debt increase in is was three $X.X in related into year-over-year in the $XXX,XXX, primarily was expense The Interest million $XXX.X due XXXX amount from the in million placed due interest the of $X.X discount XX, an due months $X.X principal outstanding respectively, amortization million financing. three in increase increase and loan June costs XXXX increase the issuance the $XXX infrastructure million and of an to million, term million. service. ended June June XXXX $X.X capacity in average June an and months ended to respectively, increase to of to primarily debt

fourth due first January quarter during the paid as $XX.X eight of interest months monthly of was XX, half which XXXX the made five months accrued interest in six cash the interest and June paid paid ended Importantly, months payments payments XXXX. of million, of interest as in May arrears XXXX of XXXX XXXX in for is interest to included of

for Equity and three million, investee ended was net XX, of respectively. XXXX negative net and negative $X.X and months of XXXX $X.X the million tax loss June

loss book from commenced of Nautilus or the date of share between value was of in distribution of minors company For the price impairment value XQ'XX, distribution. on marked distributed. result the reduction the the million from of this amount on whereby The remaining of amounts minors commercial includes losses The TeraWulf's the an $X.X Nautilus, a were a which impairment income the minors loss and purchase initial in to operations February XXXX. proportional represent fair

for was loss the $XX.X quarter compared in of million GAAP quarter last Our second same the million $XX.X to year.

non-GAAP adjusted last for quarter same to million, XQ'XX $XX.X of this increasing ramp-up $X.X Our million was facilities. by capacity of our the the year at EBITDA mining both due operating over quarter

attention assets liabilities approximately held $X.X of our of with June sheet, we million. balance as total now Turning approximately total $XXX and million cash $XXX XX, to of the to amounting million

'XX, exahash rapid of XQ With our consistent the achievement X.X long-term capacity operating targeted moving of forward. and in anticipate debt and exiting our megawatts reduction we XXX a

generation of our expansion purchase operating our reduce miners The of miners mine TeraWulf. most XP is of first the These cost for to over like unit it meaningful, also SXXj of only this XX,XXX how moment announcement, will a because worldwide, is its announcement drive Regarding because next of recent the significant latest year's to but economic efficiencies emphasize it Bitmain's Bitcoin halving by kind for event. is I'd ahead significant not immediately. XX% will just

with of terahash, our per efficiency fleet profits cost be most X.X among efficient XX.X and before the believe realized coupled sector the after cents per Come positions power and both average a us the when XXXX, that in at kilowatt, will to halving. joules maximize we

of analysis please costs, detailed XX Page our For economic latest Investor more see unit of Presentation. a our

and debt, today, made access repay objectives to shareholders during In and hope transparency Maximize while accountability. this clear that financial value providing profits, call our I simple. were and return investors through conclusion,

With the I back that, forward answering your questions. to look it I'll to pass and operator

Operator

Our ahead. instructions] line comes [Operator the with question Security. Pipes of first B from Lucas Please Riley go

Nick Giles

would for think that the these just great an Nick next and beyond perspective be color. Lucas. Good updated much. growth morning, everyone. maybe we opportunities It you XX very on on you How timing. Really that should Giles site about from organic appreciate is have. view all to This you've outlined, growth just a hear organic megawatts Thank

Patrick Fleury

Hey, Paul. Nick. It's I'm here and Patrick with

question. good So,

I think expansion, of as we'll a megawatts this X,XXX with the that at little is then about XP which we'll then have and also about hosting slots also bit new Lake the we XX well. be mentioned, replacing megawatts more are so order as and we Mariner, SXXj XX the machines

So, by right year and in us that's will obviously done front of end. be

when XX can of Mariner that's be up Nautilus expanded potential want. then shovel if megawatts XXX ready. We at And site we Lake also have expansion obviously an megawatts to and additional the

focus at sites scale staying cost. in one think sites we I are sites pleased our you and economies That as with lot focused control industry, is power have. where know at you we that number we're and So, -- we're very we of and There's the can team know, scalable. as so of these of the this know, are a pretty very two

Paul Prager

only together to team years years, team's space. sorts as that, the and do The Our energy done is the infrastructure XX M&A been thing, all we XX we've Nick, want of Yeah. in to well have I'd add right?

to properly, around Any on have to some look of been has scratch stock them. got that some miners, accretive. stock on the kind want for the going people for business deals you crazy we be It's and of to got happen team and to head do of valuations value the negotiate some those if at the sometimes we here. acquisition So, them come right not of have and be experience That's to these announced you have deals. public the these to that execute with deals, your

Nick Giles

front, Would you up of just that. come approach very it both more size of Thank you to great the say we as would opportunities? M&A some be some you're just seeing Maybe would Thank you for get on the maybe to color you there. additional how having, much. opportunities describe these

Paul Prager

losers or internal hanging is I Patrick. our where of don't to If as could Again, also have quite be sites worry going to and our the own. then and start all that halving be But efficiency there it's the organic coming and certainly on mine, going to the cost into the merging some we and don't low other it's about about sure. to it's know we as well be are to winners going Yeah, one fruit because and focus the the it's but teams about thesis.

regulatory therefore carbon to very business zero and we focused built be sensitive We're mining. our on

be got consistent has go to be with do we anything to So thesis. Patrick. ahead, and accretive But our got

Patrick Fleury

was that's space. really natural seen have the with in the gas there's we've oil power add, be think as just got I public would producers I and talked, independent companies, it years, many that's So I I will commodity think, Nick, in but too to something more we four or a there's XXXXs having whether as becomes enough anybody in right? Yeah, cycle sector companies think every the mature, the natural, look, XX and drive has long XXXXs consolidation, Bitcoin and that. consolidation been just the the That's mining with markets around early

front, will think but that both and be on discussions I of lot post-halving. a winners Paul as losers mentioned, certainly there So public, natural private, very

as and I getting think position the preparing that view company house we're order trying as our to will for can. so our that And is strongly we in like, and event really

we're there's down paying cash an debt. now positive free flow emphasis So and on, that's why

at few company to us over halving. think into away quarters chip strong the the a next put debt see the So you're in position, going I really to going the

there's again, I that XX%. no directors think we peer even Paul digits one other, ownership. double insiders, high then given such management thing, think one ownership There's board literally, just other of over other of And mentioned the have we're and it, has I

accretive. anything with are as And look so it Paul shareholders. aligned And to we that has points be very at, our we out,

I is low-hanging mentioned, set is, bar right as accretive very easiest high expansion that our really existing for the us Paul route So the sites. now, is and at think

Nick Giles

makes how just Bitmain for announced. should already what strong you've there, get one know already it, flip on to Maybe one minor free but the for those procurement the for a me, got cash here. and want sense. again it, congrats beyond any about with sense have what last flow positivity purchases you minor Got is contracted? Thanks relationship think for have you place I comments just in do agreement we to beyond

Paul Prager

Yeah, this is Paul.

with We have them. really Bitmain relationship great and I value a

think mining Obviously partner. are going I in of for and the we make got us to best They've sure scale new helped and about. and to but fleet be the they that constantly don't have a forward contracted you're to the you shareholders. of we've everything contract but scale know our our as that anything are report activities negotiate to we many have would how agreements right machines. and aware come we'd that, for But here, think respects we continue deal don't death us we what to a evaluating our we'd

Nick Giles

got Well, continue you color the so to best all much thank Paul, team, it. for you and Patrick, of Got and it, luck. the

Operator

you. Thank

go Our with next Grondahl Northland comes ahead. the question Mike Securities. from line Please of

Mike Grondahl

them ball, of the kind if best should congratulations think Mariner, think costs Paul, the to of the you've in here. thoughts late power you get got love of anything kind happen. of way sort your on you be me. general, may crystal a their Three what on I'd kind Lake guys, halving with we think front Secondly, might just about progress. summer, the on for up questions fall? just ask Hey I'll One, there is

And debt in sort then that debt thoughts kind you're maybe for you the are you of maybe in of couple were the about that and generating feeling with warrants go there sheet, levels, now some market some balance lastly guys was how the Patrick, that weeks liquidity the of free the cash overall a ago.

If of helpful. be maybe round you would that kind out, that could

Patrick Fleury

Yeah sure.

while guess one's in our So freshest those take the just or reversal I mind. in Mike me let last

I lot was yeah, speculation. a think calls. we look, some There got of So phone

that think capital I were we a transaction. contemplating markets

loud is think hearing big a you you, this what I at to I do I will not we and will call, dilutive and think transaction I in are and Paul say clear market. guys from the discount to a

are past days Those us.

We are position. now in a liquidity strong very

You our our cash XX see can June sheet. on building balance

We are, generating are you now given disclosure economic costs. and unit our megawatts that also so half We've have we latest free see and we of five presentation, all cash XXX excess, that you our flow. full in can

will, again, accretive. I just said, and ways the obviously look certainly we to has the management we but de-risk to that be like the to So would, board will team company, opportunistic at be And we really Those of position one. are transaction clear behind and markets in thank a dilutive Paul discounted capital a can we days and strength. and a not will do deal goodness us, are reiterate,

and So, things me of in year navigated come been you of and this to now kind squared here feel we away of long about liquidity, year that tricky was and very that good. finally year. for got have know We've way on as Mike, year a last a and point half we your February a a really those

we've and are So down no, now kind of to our targets on paying next as hit the and excitement there's debt. are everyone, and renewed here energy I phase a going think now

Paul Prager

notion it's it just is going is, deal, I a retail unfortunate doing answer just our as and to problem sell the at happen ain't as here. think discount. classic misreads times, going creative, constantly it's doing not to could CFO to to evaluate opposed it's if markets I not a not that, If the Patrick's at stock gossip the that's an but certainly a We're to a or of add if market deal evaluation the capital The opportunities. job

not what dilutive want transaction. in to the It's just especially do, we

a have here we're on Our so going and us shareholders to duty and I from the way to have to been go out. unbelievably fiduciary them, loyal supportive that's

Patrick Fleury

Mike, your other two questions.

the The on was, Paul. I for second think halving

Mike Grondahl

Yeah. Right fall. just late Lake and costs in power the then summer, Mariner

Patrick Fleury

Sure. ahead, Paul. Yes. Go

Paul Prager

crystal want a one. fact, and I to in don't don't I have ball have

and mining it of think of Bitcoin I possible business to be I better our at on by of think, I'm largest day. any want public lowest at need going at that in sometimes and the sector decide at they're direction in given the it miner investment they the doing than peers possible cost, in be is Bitcoin what, highest to some the think and to I efficiency else possible managers the scale. regards, everyone the

really have efficient But scale term we'll making this on outfit, constructive come to of I company most position other a and long think very think win, to I if into shareholders the the respect a that strong. Bitcoin. we'll price ton halving We to wins. win. that, just continue it up out with of I I and go we our am if do we We in the money. be then side, make Naturally, of money always the

to think you've just head grindstone and I really keep at your work it. the to So, got

constantly doing. and that that's most watch costs guy there your out to all to want make got sure efficient we're you're watch your you the costs, energy You've

Patrick Fleury

on we a August coming bit little of York, out your of in lastly here, rare. question, think and power upstate Mike, we're, July I heat is which look, New had and

they're a kind we months. April, of go in Mariner is of back you'll do So, the our I beauty they March, summer Lake what May, costs, that get shoulder think see couple weeks September, That's think I to in for are warm. of of were the November, October, kind the

get and costs that power are weeks a of And in we winter so, we cold. the couple have elevated

But miles river's Falls, right? running XX XX, is Niagara being, The miles, right, XX the of XXX. beauty, east

shoulder what and to we're priced some of think season. I coming months actually been higher out that So, back we'll revert has of kind

fall power see, you I So, should to is price going our meaningfully. think

Mike Grondahl

guys. Got it. Hey, thanks

Paul Prager

power we have add, other want facility and decades. owners just in this I for as had our to investors lives Mike,

and we're we've pricing there with of the up the pretty range seen So, it. familiar

what So, is there that on it work about, was made right what a the with we for profile we're and highway And facility. very, very excited that it because there think it's not makes it as supplier mining green as from work all cost was it power a really our coming Bitcoin what power really Niagara. energy emitted, at it's down

we're that. So, bullish on pretty

Mike Grondahl

Well, that's you. it me guys. for Thank

Operator

Thank you.

Our go next question of Fitzgerald. comes with line the Siegler ahead. Josh from Cantor Please

Josh Siegler

taking Hi, now. lot Yeah. for iron my today. of question A thanks is in right the fire

definitely So, to some follow on wanted up things.

First, rigs, decision some curious the rigs. the rigs SXXj. generation And decision for rigs color initial I'd be would you the purchase well, little on love get comparing more how also, they're around around to if payback as that to a period to could through these walk I'm had older these bit the tests if legacy latest and you've with helpful.

Patrick Fleury

Yeah, sure.

So, if answer first able part? I don't Nazar, that know to are you

Sandy Harrison

there. issues technical Some

Patrick Fleury

Yeah.

cash look, is equipment But on get, if Nazar, to of So, take, Wulf's think second price, on of as Josh, answer cost, yeah, key answer network rate. And know, we first Two and depends Co-Founders, COO, invested Bitcoin of items. we're investment then is one. see a kind can calc, short three the is running I we the is return calc. one capital And single every right? power that us decision cost couple let on right? look, you One one, that

an kind would peers, know, between we're of I you our of, term any equipment now, like would of months equipment speaking, generally say, just payback at XX when we say want and nine kind somewhere of months. And looking to so, I see

generation equipment is the for we generally what these to And somewhere of certainly sort range, probably think year equipment, so, and given in addition, four otherwise, of but, GAAP I newest even use of the speaking, right? lives in six the

think, equipment, of, And we lot be in immersion the that's using a lower life. immersion whereas spectrum, obviously so, the a average feel temperate zone, have cooling, hotter that will and of location think equipment our life with on in like more end not cooling we're of we longer given will the a used average I

say are So, then, parameters If those that. on to that you you I that able or Josh, first just are look back not, part? and Nazar, answer we get at on we'll would to the

Sandy Harrison

muted. was He

us? Okay. Nazar. Can hear Nazar? Hi, you

Nazar Khan

Josh. Can Good you Yeah. me? morning, hear

we've strong. on your had the XP, architecture and for heard on market have understand, units been kind XPs operations running the time question the So, our XP the first the that been of northeast comes finicky the of moderate. at lot quite very is SXXj we've the environments, hotter, facilities industrial and Nautilus some and been in results a that more have from of a testing both to LMD We've units, now we what that the from similar and SXXj both of in in and little

the we've kind So, had very similar. for architecture the on a of strong performance JXPs is the XPs and that

joule expect been of trend trending, performance out of a from to cost said, payback I in the high kind we're kind expecting, downwards kind per look And that, And not you getting of of of double-digit, terahash So, machines, the are particularly about terms Patrick as we closer in of get better at to how JXPs to closer it. thinking to similar, we we continue range. as closer low XX think the as single-digit if perspective, that of and the the it's we're the halving, halving. kind

be And that part coming to going halving, just, valuable. XX% and is to the into the again, a of almost big, that's efficiency XX% on difference extremely it's just,

been, in remains that expecting, of XPs of exactly Bitcoin price today, we XX-month in market through and a the range halving, will through, with thought we've earlier, where period have we and think don't but we're to market tricky, the said be kind if, XX-month the same the with Paul think about next payback to crystal as I again, year it's So, trying is where ball is that, and somewhere pricing. go

the And the a than the it, rocking to kind in shortened, extent equipment. be a we payback that that so, on through of better to new should XX-month halving about as but XX-month market think we're window does that, that period,

Josh Siegler

looking start rigs. absolutely. plugging Yeah, more in these forward the color. to as we Appreciate updates I'm

actually load For update my of moving been your and talk energy to to little switch how what progressing costs provide a potentially I'd give relief energy response an the like in follow-up, demand us forward. can testing could programs gears, curious that about upside terms you that's be. to if the was you've bit I

Sandy Harrison

about talk to want you programs? do Nazir, those

Nazar Khan

So, bid we're we two depend of a those of into capacity that participating and principal currently both them. total programs, upon in megawatts programs

been in programs amount has meaningful this a so, and that is two bid get. a be called. the revenue of And to there's to capacity summer streams first been One effectively able into that right we've we those

it's capacity second kind when is, revenue a payment an comes bulk those the and we payment curtailed effectively so, capacity from of we fixed earn the So, of and payments. are energy fixed the

this year, megawatt an is of, energy say per going we're I the in would to come will offset single-digit that probably In level. about to kind dollar a way somewhere of cost. total kind think And per recognize, the hour in we low

about will this that single-digit of kind megawatt cost distribution in we we there's about, think so, per think energy of a plus cost be basis. demand we that it terms and less our the we think when of in on from earn summer, low transmission offset kind there as revenue hour figure an from So, the dollar response

cost. this entire a digits high be of we've to to facility, mid to kind bid summer, in in that into summer As total number offset ramping get of and been single the the our dollar that of kind hour we're in next per megawatt capacity we as of the energy able terms should

Josh Siegler

color. Great. it. I Thank the for you appreciate very much

Operator

Thank you.

the ahead. Our Papanastasiou with Bill next line go Please comes Stifel. question of from

Bill Papanastasiou

question seen just first within of kind the Texas. the other the bit uptime. hoping that some end. York to able respect areas in more the States get key We've hoping quality cost a infrastructure TeraWulf to location color little is color to compare, to held of and Hoping on assets areas, lot Two with the with mining other questions. a Pennsylvania United portfolio, be curtailment in to of My gain New more and to

Patrick Fleury

come to is first visit question. our sites. Yeah, thing that Yeah, you we invite love the I

you advantage. Separately, got zero some we greater to away dealing fuel think believe resource diversity. you've fuels. when believe because in far I absolute of the the walk that TeraWulf pricing Clearly, in think with with we carbon with will fossil I volatility regional in clarity you're ultimately, respect

getting is as become ultimately hot. really of and crowded. you've and what how extreme I the Third when and really really, be that's It's the to real their think grid temperatures responsive seen to inability to off, driving And efficiency the kind miners a Texas of pricing. extreme their their range happens

and as we're the cent for we're power So, of I mentioned earlier, Nautilus and couple at summer short very Patrick mean, of at about it in period a so, time, two weeks, a or sensitivities that's continue to and steady we're pricing low at be climate that we'll to want we temperature, cost way. but due and and see to it talking we're

Bill Papanastasiou

continue of Do you. the thank my get to just towards more is of million respect $XXX proceeds the you any Great, some with color And foresee then hoping ATM. used that the the million being down to plans thanks. second question understanding be flow there, will next to by to color provide cash is sweep loan? need year down the paid paying in any order you April term can My $XX

Patrick Fleury

Yeah, great Bill. question, great,

yes. So,

we I loan by maturity. we now guys be term kind that Like loan are sweep keep flow given, XXXX $XX the of cash term that to start million to free free where I think for reduced sweep a said, positive, April see will down. has quarterly on through to us flow of that cash you by So, basis the

we'll So, achieve quarter you that. and of update economics around on progress we we every that to kind that as will today that feel current continue confident we

those And use financials we think used see hadn't little will a before. the at we I look bit and our it did regards that ATM some ATM, the with quite to for time

So, see but, it issue, is in it when you quarter. use is us ever, tool know, our we such, cost again, it's dollars accretive many that of it a ever have, you hundreds Bill, ATM millions the a peers, and think accretive on capital our unlike will we of of and of we'll never, that is

capital, That the dividends share on Paul profitability, or shareholders, then, obviously, and, whether as returning in game is buybacks. shareholder focused, form debt, we're value, just not of maximizing paying that's ultimately, our and to mentioned, down

Partnership and seen all I been I've like energy. energy long power Master a Limited the the models think, we've for in time, space around succeed, model MLP

of of us think more interesting route kind down. for a I that's And so, go to

Paul Prager

fruit Yeah, hanging we legitimate so, zone very judicious responsible this over of XX% will ATM, or is be interested it as have sure use I low just expansion, been. insider with that we our am of guess activity for purpose, the can accretive the is of think not an and like be explanation and shareholders, I this that company. I and you in is a diluting that unless

Bill Papanastasiou

at the megawatts, region consider areas if the you. facility for I North I weighing talk ramping looking the option TeraWulf in thank Lake and And kind very would United that States of one to how's concentrated think you scaling America, or versus question, one Great, Mariner in capacity, XXX just full could the company potentially more of other said being matter? in

Patrick Fleury

hey, Patrick. Yeah, it's so, Bill,

one right? Paul not When so, not one companies it and So, of geographic I think that commodity kind I and think of that invested again, of one a all XX-plus to peers in one, from personally, all no assets I their any we right? the background, on has prior mentioned company yeah, Paul company ever invested but institutional come And diversity, investor region, right? in, I to don't come year want in I in think from, my look, alluded think, pick I I I of question

think, we regulatory won't a the I to definitive won't of regions, us go is. world we those in to the regions, where good what ultimately, power where best for change think, and reasons, not may Texas, have one, of pricing you go see time, reasons, regime may have we regions as go diverse so diversity very there's and to how is look, regardless law, other a you point, strategy, the your the And that's cheap all we there's to I geographic and and see of rule

we really of to if kind impact big, and the become other. untenable, push sweet tens sort big you're one not I are a it's So back, where, curtailment XX to you're in the politically grid of dollars kind carbon, think, all fossil we the a on you bullseye response particularly the kind not have demand of of and enough, It's know or having getting becomes of That's fuels. megawatts XXX-ish revenues, of utilizing have you're as size on really spot, zero found megawatts. millions don't the when to right way because you your the between grid, that

of are don't go the I pieces, those mindful of that think be expand think certainly very that, kind having, ultimate will things we'll is, to we lot a as place which So a to the but think, be the the up company, carnage for we beyond natural, wait, of, Bill, look I pick sites, I other our think I pre do we'll side. on there'll see, very

Paul Prager

with Yeah, it's if a years diversity will, to and their got site, to to with consistent opportunity, the manage add got you risk, be of which experience region. mining I you carbon that, particular the also of XX the geographic in and but would is again, to XX thesis, or years or knowledge zero

goes the with very think, into But evaluation. the we're all we into So, I having, going our sites comfortable have. it

on out really on our to We we're their side, the scaling these grow and people at and have of experience side, them and energy in just infrastructure room on cost not side, plenty building the low on facilities. pricing but

from what So, the you'll halving. I think through see us that's

Bill Papanastasiou

margins I impressive again you, quarter. and congrats the on appreciate the Thank detailed this responses

Operator

you. Thank

Our Lev with next Mateo Parabolic line the ahead. go Ventures question Holding. from [ph] of Please comes

UnidentifiedAnalyst

is a shareholder as your enhancing mind Good for and opining congratulations to on versus HODL sector key scale on the in this between your no it relates value? a HODL you, and would quarter. morning, Had guys, you growth question differences what model revenue

Paul Prager

I This response. want Mateo. Paul. thoughtful to in be is Sure,

As in buy could into mine holding business mine could their where at could and fund But CEO [ph] the put business Bitcoin, we're operating Wulf profit. a it it, an to think you an right, you and a Chairman Bitcoin. is is could about you you your Bitcoin, supposed it company, individual wallet, stock, I ETF, who to Sellers in an buy believes investor, of and I buy, all buy into of am Mike

is unfortunately, other some this not wizards maybe they're And miners, tech. see they operate, what how or managers, either the to I public themselves don't on lost of AI we as investment pioneering It's know maybe again, think, who, high they do. of and

operating an are We company.

money. make the We business are in of Bitcoin. mining We

at our is money, mine when scale. the cost, efficiency lowest mission. we That shareholders highest Our make at

to people do the have We it.

think that investors exclusively right assets do We there since to the is member do it infrastructure I have I are incentivized and our and team we of and and alongside to management every it. shareholders,

probably want distribution. our using growth time, that, Bitcoin to expansion, after and CFO, it's HODLing and will advisors, investment served I I I'm from and best I'm take debt to for Bitcoin. down our a shareholders, what are as dividend our guidance to CEO always strategy, best the by obliged look with are a an duties At to is, our to but confident and try or declaring pay this fiduciary the facilitate I my listen Patrick, shareholders board, evaluate a alternatives at

than complete this think I arguments time of your at hope that's to response I are and all those HODLing a more question. compelling

UnidentifiedAnalyst

I great like was that the especially at end response. a dividend there. part No, the

into hope I appreciate get guys soon. and efforts you And I So there efficiency business. this putting the you're

thank you. So

Operator

[Operator comes line instructions] ahead. Riley the Lucas Securities. next question go Please with of P. Our from Pipes

Lucas Pipes

Congratulations Good Thank you much, operator. very progress. morning, the all everyone. on

you time, I where equity to quick terms for in provided to earlier, just Patrick, your to question comes Sorry, color follow targeted do be Thank like much. would ultimately very of caught up it but appreciate structure some A the mix? had you've I calls like of toggle Really all when capital the most that over call. you already.

Patrick Fleury

sure, Lucas. Yeah,

and I going number you're then hearing one much reduce down the I think that to we now can focus as definitely, we're us having. say, think profitability pre as as So is right debt

gone and the space. space all financing I target that against there that, So the to $XXX They're million not beyond lot think, is I a think debt think and of for reality were then well secured doing the is the we're get below debt is reality providers out there's just available certainly that machines. much this look, I there I think to

we terms. said, financing have being good, That attractive pretty pretty

good deemed yield is at that high behind XXX market crypto. which for basis X.X% at the something With pretty points or XX.X%,

the from So, I rate some a on think the company of then, kind of in debt perspective having future. and level

is, Yeah, be post just likely take at that position but specific I sense, I think of now our either more makes we think I M&A playing distressed again, or will is, find sites goal halving or what to sites very right particularly think of strong be attractive. offense advantage competitors position additional the expansion sort us a and of to that in to and

and so focus I halving focus see million. pre next and you to quarter, just well below think that important a on obviously over you reducing $XXX few quarters update a the will debt And very we'll every but down

Lucas Pipes

Thank very you Patrick. much,

You and work. good team this all keep up Thank the you.

Operator

Thank you.

closing will As conference there are comments. no hand now questions, for to the further I Prager Paul over

Paul Prager

the cost, this XX% is to much. at at very Insiders shareholders in you Again, lowest our vehicle. highest here Thank efficiency Bitcoin as stated, goal over of the mine are scale.

to spend it be looking is money will unless We not accretive.

see holdings it's collective and we path own unless for our accretive our success. a diluting in interest no have We

forward want until thank I to you you available quarter look focus in November support anytime invaluable that trust up are and on time. we as all to to your and on leading the entire third for call a mining always and The building of we I company. speaking team

for morning you. Thank your loyalty attending thanks appreciate again, So this and we to TeraWulf.

Operator

TeraWulf now concluded. for The Inc. your conference of you has Thank participation.

You your may now disconnect lines.

Jason Assad	Director of Corporate Communications
Paul Prager	Co-Founder and Chief Executive Officer
Patrick Fleury	Chief Financial Officer
Kerri Langlais	Chief Strategy Officer
Nazar Khan	Co-Founder and Chief Operating Officer
Stefanie Fleischmann	General Counsel
Nick Giles	B. Riley Financial
Mike Grondahl	Northland Securities
Josh Siegler	Cantor Fitzgerald
Bill Papanastasiou	Stifel
Lucas Pipes	B Riley Security

TeraWulf (WULF) 14 Aug 232023 Q2 Earnings call transcript