WULF - Earnings call transcript Q1 2024

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Operator

Greetings, and welcome to TeraWulf 2024 First Quarter Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.It is now my pleasure to introduce your host, Mr. Jason Assad, TeraWulf's Director of Corporate Communications. Thank you, Mr.

Assad.

begin. may You

Jason Assad

and TeraWulf and are results in These get uncertainties, to remind Good to anticipate, started, earnings expect, during operator. and forward-looking Chief welcome statements TeraWulf's make that are subject forward-looking Nazar to and remarks we this TeraWulf our the everyone subject are uncertainties, the will, call, differ forward-looking to as time. Officer, differ Officer, results risks like statements, and risks could, Thank used statements and forward-looking With When by they potential, afternoon, uncertainties, forward-looking me involve estimate, intend, quarter may Khan; Officer, project, contain Operating which believe, call. actual Prager; I'd may from question-and-answer and are to materially. Chief cautioned today cause we first which Financial Paul actual at Patrick materially enable, you, words Chief may and our to that prepared are should, this Fleury.Before Executive similar may relate risks session. statements.Investors and such anticipated additional statements those Chairman expressions

over that and in refer other note today's we'll then U.S. today's Q&A.It's proceed Paul public risks addition, TeraWulf's certain XX-Q to may call, please pleasure with turn remarks Patrick, and for our terawulf.com.Finally, we'll section financial on investor our measures inform company's corporate to terawulf.com. on may prepared on website fully sec.gov Paul? performance Investors of founded deck, our described to Please at are and investors periodic also from Form my call financial of GAAP to of the these full and website measures. to refer like the new to to reports and Nazar non-GAAP also more with at most We'll non-GAAP now In be XX-K CEO, the Exchange at viewed call filings TeraWulf's which Securities be Paul, our I'd begin reconciliation which Prager. measures. Commission, in comparable the

Paul Prager

your Thank afternoon, into results. you, Jason, today We financial our good as dive quarter first XXXX attendance everyone. we and appreciate

last months growth TeraWulf's are energy highlighted of and These fiscal ago, repayment accomplishments the couple over achievements underscore of we organic existing the substantial at We year experienced foundation our and unfamiliar excited talk a sites, liquidity. earnings X debt for throughout from call, and strength Just you bolstered today.For significant growth with to at achieved infrastructure, robust of the we drawing the decades experience. in set specialize we our stage those about growth to TeraWulf, XXXX.

centers, energy a focus data Bitcoin a our joint on more venture with Operating of grid X a presently with terahash. capacity we where while Talen, per exahash per exahash to over operational principal XX% rate fleet by practice and second to Lake Building also actively end of and our June the X miners of an per consistently exahash Nautilus sustainable than of expanding Mariner facilities and XX.X XX,XXX in Upstate to New terahash, with scheduled efficiency powered fleet projected we to deployed a per XX raise per we per utilized fleet our Mariner resources, Our the take capacity. mining York We're clean joules nameplate expansive hash and megawatts installed efficiency Building great XX% second, commencing by be with centers from construction. miners utilizing from infrastructure pride employ sourcing midyear terahash self-mining capacity. primary mining, second joules stability. mining zero-carbon our to These with combined efficiency energy at our sources.Our of complete Cryptomine, have XXX contributing Notably, are operate Lake of total XX.X of at at subsequently power expansions currently impressive approximately X X XX.X in joules Pennsylvania, operations of XX

of purchase a potential Building of favorable year-end with capacity by X, have in secures our the X we Bitmain infrastructure deliveries.Looking finalized in one of fleets is to but to SXX will XXXX. the Pros, to SXXs of also agreement efficient XXX ensures exahash our expand Patrick most option a new the only and further industry.As future to goal XXXX, contract pricing deployed the This elaborate, achieve and up for for prompt XXX-megawatt miner plan We forward, trajectory. to megawatts growth with occupy solidifying infrastructure miner delivery not machines

As an applications for committed ongoing bitcoin our The or identifying to significance energy owning optimal scalability overstated. infrastructure infrastructure high it's business, whether and cannot computing and development of megawatts, endeavors. be we mining are

thanks extends peers, our digital our optionality Our beyond of well infrastructure. and to that energy background existing

energy when zero-carbon researching, In and assets.Over last better innovation is to months, extensive scalable, and it has fact, low-cost on comes I our our owning deploying focused scalable X WULF and no been Compute, TeraWulf infrastructure. developing believe positioned the infrastructure than internal miner hub digital

HXXX compact Following growing Mariner system, a power GPUs diversifying our we infrastructure, meeting a zero-carbon at applications. AI low-cost our at phase power coupled is aimed X-megawatt pilot for NVIDIA Bitcoin from as TeraWulf's a revenue energy which support part initiative, streams. with access mining a large-scale Lake the demand invaluable could allocated broader to GPU over and facility, computing block of high-performance successful involving X,XXX

to cooling of current how remain scalable abundant return value The to steadfast and in leveraging a financial we sustainable demanding provide owned strategically is are Nazar from access fulfill extensive demonstrated Sachs. valuation.Turning detail the maximize more energy and approaching our contiguous water available, value access value a low-cost well AI market will position. reports infrastructure specifications hyperscalers, Morgan the to debt carefully in attributing for of direct shareholders. land and offering data recent and framework.In few our We both constructing significant moments, Goldman our opportunity. the in to our sustainable We ESG infrastructure sites Our properly our adherence research for repay as suitable as Stanley and undeniable, HPC of to centers resilient, as infrastructure to believe isn't inherent profits, market and immense

highlights EBITDA $X,XXX EBITDA the the We an performance achievement a Our peers. GAAP of first of XX%, exahash consistent [indiscernible] industry-leading of public our highest in gross profitability. TeraWulf's quarter translates to of adjusted of which delivered inclusive XX% increased million, and approximately which among non-GAAP to of per $XX margin

and two, shareholders therefore, miners: they are We advantages future EBITDA highlight bitcoin less SG&A one, are than public three, per achieve management peers.Why other more versus peers; of public all TeraWulf's consider? low-cost profitability. $X to Additionally, zero-carbon million stock-based far and growth the of these larger quarterly to all and comp Because our level below efficiency. competitive $X important our for million and of at and capital our require generate of same as power; exahash profitability peers statistics

team manage we maximum shareholders. is our Our to for and TeraWulf mean lean, profitability achieve

us industry. the rate We for bitcoin management.We lowest our exahash, a cost in cost are lifestyle the one hash post of per at a not to estimate network company bitcoin utilizing as XXX mine approximately halving, positioning of producers a $XX,XXX

sustained returns CapEx dollar forward, that we I precisely on debt whether our remain of investors every enables want or versus and At the expand generate within capital from firmly hinges It long-term growing of referring our Looking what? significance the is prudent with equity to And conclude approach nearly same believe do I we our the my This cash keen on allocation deployed capital we differentiate profitably the flow, underscore ensuring and crucial. our relationship by TeraWulf, efficiency? focused business.Before squarely capital speed expansion, what to between in to mean to is underscores shareholder driving At that value. operate creates I today, of true are exahash to of on free a companies for on focus is remarks guess spend utilization all on distinction funds, WULF, believe capital our our to the derived efficiency success The equal. I'm shareholders.So This and discerning resulting that capital firmly between sustainability growing. we returns efficiency, not maximizing dilution. commitment simply strategic not created that the the returns. framework. but for

demonstrated have our with quarter, alignment after our this shareholders, team, maintain which stakeholders.Remember, alignment investor. one to dilution we minimal approach yours quarter As ensuring truly, is entire underscores including with of the the management largest prudence, you, our among is

capital what defines truly the strategy is and our So exhaustive efficiency. modeling beyond analysis

also our a a focused the to Compute's results should Nazar ensure dilution You will with the is friend with than fuel the growth detailed is our of utilize what It financial a CFO, to clear that decision-making delivering to that initiatives delivers to while peers.Now the and sustainable on undeniable invested model And spent not of to investments when TeraWulf quarter. profitability every WULF make our decide serves only objective value. some adaptable we for any core that our the us call substantial of of lean dollar is before more empowers that ATM, that that aren't return. elaborate approach It guiding that to is every announcing opportunities dollar shareholders. hand business less when over maintain absolute process, profitability provides it competitors on why long-term our disciplined TeraWulf.Capital Fleury, the I'll seizing yield conviction rest plans. value align our partner, first Khan also but our as expansion This substantial my and us of generates review Patrick differentiates cornerstone efficiency growth, with assured returning

Nazar Khan

and good Paul, you, Thank everyone. afternoon,

demand the regarding into for infrastructure. to Compute, of delving the surging like provide some latest Before I'd context energy WULF developments

our the power generation mentioned, Paul sector. As lies expertise in

both Central the Over States today's pertinent various financing, in past particularly the X we've has the operations our in understanding development, been decades, blocks, power operation key and in construction, involved facilities, to scale in landscape. overseas generation jurisdictions. ownership domestically of our of that's been the power and United

zero-carbon sufficient infrastructure critical high-demand concern.However, become remains such AI, then secure so as solutions. and XX and XX loads the and These to these a primary second, significant constraint. next Once X timely to and power access have compute to HPC considerations loads, within months. met, securing advent are do high-density objectives: first, power to at ensuring the objectives has energy With power primary to of to low-cost access a to power scale; shift access

TeraWulf as resources, towards capacity compute counterparties high-density gravitate to each our infrastructure engaging objectives, fulfill to of allocate various portfolio energy loads power Fortunately, these substantial with areas ample actively with the boasts accordingly. we're

to facing alternatives.Over challenges X the escalating developing to are digital months, The of August.We're our collaborated and our GPUs. with blueprint We tailored of completion for in and industry facilities liquid-cooled the requirements and the by stages engineering the GPU are this, site, X-megawatt of low-cost in closely several are these construction of been early has scalable team current in To Mariner WULF culmination this efforts counterparties for transition dedicated regarding as with Traditional and thoughtfully our is has the zero-carbon design the early past density this capacity. meeting of Lake at such NVIDIA the the facility next-generation to data air-cooled slated discussion analyzing infrastructure. demands. leaders rack Compute centers currently address utilization

to of the expertise market. growing lies rapidly energy expand increasing and infrastructure, remains the our objective compute core TeraWulf meet of our to in facilities demands high-density primary Our energy

easily XX-megawatt Each various we're relates AI, facility, extracting our infrastructure in stages initial most the strategies you'll and strategy designing from our see margin capital, for distinct operational presentation, considerations. scalable.As now applications. in we've investor to HPC X-megawatt Following be summarized the project, engineered our value entails it to final recent as of

and model. that most strikes over optioning acquiring few scaled, to to dedication colocation, year. increased into into infrastructure potential we current infrastructure ownership data it, the in and at to capital-efficient become our a zero-carbon between interest highest infrastructure center next of for structure next-generation plan infrastructure constrained rack-ready growing per that megawatt demand the value space the is the next low-cost, of the forefront We designing is approach to our energy creating white on shareholder long-term grow they balance Given in believe manner.We Hyperscalers the are and for revenue of being supply energy more focus expect energy market. years. aggressively the by building offer energy time the the belief our and path the This over over

further.Now additional I'll quarter. we our opportunity CFO, provide sites forward, the for years. bolster next capacity to review compute envision high-density first to financial Fleury, a acquiring Looking our results This will our of existing assets and hand our detailed XXX business leverage to an within to few involve expansion over megawatts our expand the may the call to Patrick

Patrick Fleury

Thank you, Nazar.

'XX. agreement bitcoin in outstanding mined associated quarter-over-quarter, additional X revenues business stated, XXX growth financial XXX per from Bitcoin profit XQ outstanding about execution. XQ We expired bitcoin Mariner As XX% increase $XX.X 'XX point Lake XXXX.Our and Bitcoin from with self-mined and in first of we of the of 'XX. XQ Mariner for Bitcoin first our at 'XX quarter driven Bitcoin February that a and in strong received an million Lake mined XXX $XX.X all across XQ the total 'XX of favorable Paul metrics, X,XXX the fundamentals Bitcoin by XX.X a XXXX, XX saw our over hosting share in sharing and million was quarter In in reaching XQ Nautilus or was net at GAAP in XX% day,

per mined for Our quarter, total $XX.X press non-GAAP a Bitcoin $XX,XXX reports averaged monthly as operating in releases. at self-mined includes point million and of metric and bit defined our a per Nautilus, this that value bitcoin detailed

financial GAAP equity, to consolidated XX% also of in we now XQ cost on for of $X.X venture was Instead, in in impact XX% from XQ between increase of financials net the statements. into profit, Nautilus a the in line in and Lake $XX.X over GAAP loss GAAP $XX.X investee power income due realized the 'XX and or at the GAAP revenue, gross a revenue, quarter-over-quarter 'XX. XX% joint tax exclusive 'XX. increase a our in financial in at saw XQ ownership 'XX.Looking to not million operating and Nautilus, key statement.Our exclusive of million, quarter-over-quarter Nautilus depreciation higher The net depreciation amortization revenue XXXX of in was our of in XX% the a there of XQ average reports is Due 'XX addition an the at depreciation, million increase exahash operating to XQ are guidance. cost item our income costs expenses, our As operating reminder, is difference $XX of million Mariner increase to principally monthly reflected

to total Our point mined, in non-GAAP Nautilus bit XX,XXX XQ XX,XXX cost was power a 'XX mined includes Bitcoin that 'XX. at metric per XQ compared in

to in company in for operating a our proceeds 'XX received as in demand $X in records of unlike response reminder, totaled 'XX. a our expected financials, As revenue. GAAP cost XQ reduction programs monthly reports, the million and proceeds received XQ be These million $X.X and

in guidance, As kilowatt power demand $X.XXX impact hour the including response and expect to achieve cost, Nautilus' disclosed XXXX per revenues of XXXX. $X.XX power our we an of average in

were achieved average at 'XX, 'XX per an we hour.Operating quarter-over-quarter in million $X.X stable power XQ of expenses XQ cost XQ and 'XX. For $X.XXX kilowatt

expected in million $XX.X million XX% XXXX, be is from to guidance, XXXX Of increased our and 'XX approximately to operating in in operating Nautilus. at expenses Lake SG&A expenses at XQ Mariner expenses XX% of quarter-over-quarter the Nautilus. disclosed $XX.X As $X.X which XQ at $XX.X in we total, 'XX. expect million includes incurred

It thing.GAAP account filing theoretical holding do in is our of $XX issuance see BTC date as bank to income. stick in of will this far to to for our methodology supposed with of changes realized amortization XQ meaning the for and and with if substantially determine to includes $X.X loan am theoretical and adjusted paper, that 'XX stock-based due expense the adoption to help 'XX as following XQ industry and the placed versus capacity when realized debt cash depreciation million in heavily in BTC However, my on from million and infrastructure done life of which XQ not quarter FASB value well an interest million quarters. million for is reported.I $X.X value as XQ HODL the spend accelerated given gains marks fair rule, million was service, stock-based approximately quarter-over-quarter to $X.X fair investor peers April of $XX.X in in 'XX. breath interest based cost be million inclusive of the the year-over-year normalized if $X.X gains, we the 'XX.Adjusting won't million useful important XQ And into thus of to by to of $X.X replacement net business. as HODL peers recorded result comp, discount weighted in market estimated XQ our is from an was to it of the XXXX. financing. XX, million, in mark-to-market critically year to to the which our cash entirely increase in cash EBITDA" public many have I gains term as our and EBITDA company's anticipate related in disclosed holdings XXXX 'XX, guidance, SG&A on miners 'XX their increase currency, certain us expected Depreciation quarter $X.X compensation first value SG&A decreased company XXXX.Gain mining SG&A XQ continue the shortened quarter-over-quarter and in on be watching $X.X of fair million related note, It on increased more this in self-declared generation is mark-to-market our as item it's accounting the incurred respectively, early debt million expense drops new of expense Bitcoin "adjusted is report 'XX telling in to net new is quarter amused which a price X% you million balances our 'XX. for of leaders flow almost $X.X line to of first is right in the which $XX.X digital peers first 'XX all

from a the further the the total connection incurred In principal These of in However, of April.In million This of of paid 'XX cash a million total, in income of income of of of unamortized $XX.X compared and cash XQ 'XX. is over we the repayment million voluntary during balance loss 'XX million $X start to of proceeds. in net debt XQ was proportional XQ recorded interest has million 'XX, repaid only tax associated debt TeraWulf's operations and 'XX share million free in result joint XQ since XX. $X.X million amounts down equity the fees of a of $XX.X investee, $XX.X $X.X of trend from continue we million with prepayment with of its recognized extinguishment the Nautilus million, $XX.X with $XX.X $XX company of million company net million of 'XX, $X.X 'XX. as will the million prepayment discount repaid $X.X reported XQ XQ on debt early for $X.X net of in This debt X% represent million.In equity decrease in XQ XQ of reduced flow in as over debt by $X.X venture. and

Our net GAAP million 'XX. million for of was quarter XQ a to $XX.X net loss loss first $X.X the in compared

XQ to for balance million improvement non-GAAP million, XQ 'XX the over $XX attention was a in adjusted XX% Our EBITDA sheet. 'XX.Turning our $XX.X

total As amounting million $XX.X liabilities million. of to $XXX we million with XX, March and cash $XXX total in held of assets

rapid million $XX XXXX, debt of anticipate $XX and we in move our the through to consistent estimated repayment in million first with we week an a reduction July. As long-term

our SG&A higher hour power average in of we legal 'XX 'XX. kilowatt excluding in XQ was updated million.As in XQ into and per expect per fees.Lastly, at and and in net realized per in of agreement audits annual or to a with the our at annual half cost of March May and guidance miners, $X.XXX XXXX, including of company approximately held $X.XXX of $X.X to it XXXX and transparency a funded and accountability.With steady by and which kilowatt higher the and SXX end XQ seasonally XX,XXX expect your expense terahash realized slide, The XQ Lake single our cost X the financial the and approximately SXX projected debt Mariner Bitmain $XX.X of entered we WULF, cost portion that, access $XX,XXX 'XX questions. every hour million to X,XXX than repay back providing debt profits, company SXX Pro return expected due purchase miner capital, of shareholders, second our 'XX pass deposit production, $XX,XXX forward an the in filings, deck due exahash per clear and and for of additional approximately on-site to seasonally investors remain company additional I'll BTC working and answering versus value million on has marginal long-term $XX positive miners. simple, related while to an investor maximize disclosed pricing through achieved lock $XX,XXX a achieve paid further option quarter-over-quarter $XX Our higher miners. to objectives current look Paul to costs At

Paul Prager

with Thank our again growth infrastructure. joining TeraWulf of the closely our summary, investors. aligning the its assets, economics ability to stands We with committed you, scale us profitability the delivering to best-in-class and for at of unit interests remain unparalleled forefront while owned lowest In and deeply consistent industry today. once

As undervalued capitalize and confidence exciting we've we position opportunities the on in trajectory leader the uphold The we continued add efficiency the currently to our deliver Together, a run, our value is support ahead, continued appreciate shareholders. by importance look to infrastructure capital potential we market. TeraWulf. sustained foundation believe underscore We to in are our success. our for poised your laid and and strategic as

Operator

Siegler with Fitzgerald. Josh first from line The Cantor comes Instructions] the [Operator question of

Joshua Siegler

I unit start here. of helpful your cost breakdown the really I investors. It's very saying by appreciate us, just want to for

up was maybe wondering that expect to that you've debt now. you've halving? you Do once passed profitability now really open we this demonstrated first profitability markets For my perhaps proven post having, have I more to financing question, channels

Patrick Fleury

a it's great question. Look, Yes. Patrick. is this Josh,

we before. post as kind old there's the up from of put like gets in level of think mean, our been the ground separation think to so for mentioned, flow that markets not to because inbounds, I've slide already lifestyle time perspective, more business that markets the the very and I business obviously out. there'll really over deck, a do a bunch I and I'd reduced. this needs put level, profitable I see Yes, our kind reopen.And from have debt think that be a has But a as talked it's collateral the that miner the think think capital model that teams. a we are grown Page work turn management well. and corporate like just of mature debt halving, in received all and more didn't slide are XX, assumed companies, about I that see our I but that are cash we finance free to possibility. of certainly corporate for I'd debt see has candidly, we debt Yes, given I Paul not pay in the we are those opportunities providing that a take there's a bridge debt. And companies year. set down of of as debt and our the we've you'll

the us, and X are So could and long-term companies public beasts. much revenue and into we it's see XX business, more I the all to a not. you've of contracts, whether or have XXx because high-power a one, that the have we get space, those kind pivot leverage mining EBITDA, keep Xx business for very to business.So more really they a think trade bit financing us it question kind compute of become really to and AI at we got of into But that, will it as silos, stable space, as the different compute Bitcoin want I

I'll that. just it leave yes, at So

Joshua Siegler

in did for ago. was you works over terms to that the bit up when months have Following deck, business a second WULF? my potential HPC the things model look may of passed, side you more couple models you becoming a that about like about pilot notably, high-performance more in specific you your want compute ask was pursue with talked another comfortable just the question, future little of I last outlined now And of was I X and for program that, could you're has time the wondering HPC if what on of one here.

Nazar Khan

as energy Josh, I around is noted, infrastructure. really we've core expertise it's Nazar think our here. Yes,

so to are we design of legacy been GPU and getting a meet centers given comfortable lot not And next-generation rack is most the data going, working able we've efficiently center, more the needs. power may density to be where data

used meet needs. think can delivering we're just we a designing so infrastructure even that from beyond, And digital of infrastructure Blackwells be can and for not but HXXXs kind that those

this our get spot alternatives of infrastructure, around and a page, customers the a sweet deck, bringing our kind middle we along is design, into think infrastructure.So, facilitate we lies.I for very an that's who it's is that.Now Patrick chain, and XX are the further long-term If participating put mentioned I be owning ownership having do there. our finalizing So to that financing spectrum a think could we're that able the that the Page and see that said, kind at know getting as to GPUs, we're And it, out of design of in full where on between we can kind the post things, of X-megawatt or column other opportunity, Patrick that we add really of pay may in operate in that kind up, comfortable we'll being look XX-megawatt physical of kind of middle that, what think you if of to we that. really the expertise in But so. don't if focused being pilot, column we're just for facility. currently, kind more

Paul Prager

centers access is is kind little for This kind only this to which all continue for think again is that the permit shopping we're land calls, one water they're WULF, of means a unique energy massive stuff to north.I has power. a makes energy Not the looking thing of that out contiguous that their all our to the the of data for volume said That is head going bit these build infrastructure a Not sites. business. of not but exciting, to want Paul. of has terms which for everyone trade, value infrastructure just The Nazar to it one add on water want. I'd to in we're day everybody that looking scale of other and the the

on returning just think it's Amazon I for us about our work sort regard, the of one or maximum that in to focus -- opposed inclination that think guys. is having column of as Meta, value it's shareholder I those to So to middle because

how Josh, needs that's really it. to understand point commitment and we it. at We're at these sort of so about also remain currently very that one And are mining a study as said, it.That to I much But this it's days, needs don't one as and think to important us thinking we're Bitcoin. make this good really early market

best Bitcoin. it. we I in in think believe at class we're And

X said a earlier, see what we HPC buckets couple of which out least X having is Bitcoin. ourselves think, possibly mining I So and Patrick at there,

as that see philosophy. continue driver of I think our you'll business a to

Operator

Securities. of Riley B. line comes Lucas Pipes question the Next from with

Lucas Pipes

serious guess matters. I system, have up to classification that Patrick, more in but industry look I'll

well. We are the power hearing Paul, And a AI with markets tightness you know power about the lot growth. markets in extremely the

all geography tightness Do to see it it rent? the true, then Is your in hear anyone that your on Is is economic what that that So you if who gets thoughts that. the power to I PPA? extent is matter this. Appreciate And on with a markets? of in it opinion wanted utility, this? does And true?

Patrick Fleury

to respect want start you follow. HPC do and with I'll Nazar,

Nazar Khan

Sure. Nazar here. Lucas, it's

So timeframe for mismatch. size the landscape, demand of we the the The the is look there's available. and at as a which supply

infrastructure, case you things and scaled particularly where a the And with supply. it be point So from enough low want if a if comes available time helps have to access zero-carbon the and near-term And enough at source. cost now we're solved. at right strips a time in money, demand that's can power the you

to to available all of power rent. be where places you.And of we that so to the infrastructure that find the as or there's capture of right you owner variables it, not able can or use think Now many about the that owner procure those should of kind that

we the or happening these the of with they're one that's sites at of And as not just in are if and the they're ultimately there optioning out at up. optioning look the today, But worry they near-term, can. about not, hyperscalers kind capacity now of they And they'll you it concern that spectrum, many whether flush tomorrow. all so what right their cash end for as use see is up

for it. where model we so, to XX can did amount the there going demand value And a is how available the fair They of access into operate think for we've those and And that that that models places other so traditional we power the how up Microsoft called point enough be think developed.And we're whether constraint centers of evolving that from gigs so territory, at capture deliver seeing with that of capacity the and megawatts we're business do the to not still that best then again, meet positioned are to We site.So our fundamentally or I and positioned where need incremental from perspective, announcing yet do a rent. should they XXX that That kind again, demand. got thing think so for Dominion, occur. we of said be coming sitting said data seeing supply Talen us, at and the went is will think capacity again, have themselves, those occur, supply and be you to saying, that's we so capture what to will those Amazon you. Brookfield you that may that, we're it's megawatts. still we'll will also out the but demand we XX.X serve directly build -- occur Dominion procuring sources to

Paul Prager

competition bad in a then created because you're end if compete hosed add is, the he's contracts, power, sites for a power equal. bad business earlier because today, good with said of it's think model Patrick bad to Bitcoin are The these you've miner being Likewise, a have some it only with of at thing well, you at mentioned and that to but contract. whole I a different hyperscalers day, the level sites not he got got I to power fellow look there all would power

size right never You'll your costs.

And good power. so we have

power, power but location, good good really have but green We inexpensive. in that it's

you I way, And your to you them. that's in the great about to and making be where agreements by have really think have transparent So bet. Bitcoin power mining look of at some ought shops are the that

Lucas Pipes

yes, a context. Really of question. provides And, the appreciate Quick that color. second lot

XX,XXX towards whereas Just rather longer of an as or think had term $X.X terms -- how should to relates itself a million by timing we additional about perspective kind that kind you growth. and beyond in it of then that from that of miners,

Patrick Fleury

you I for but pointed kind call the Lucas, right, really on and us hesitant out. what and is miners gotten a beyond profit the think I for X,XXX mention deck, past mean, weeks, we to contract, at what been that the XX you share.And this, of out end be I whole discussing our delivered X to think few in perhaps are total. concepts -- like even exahash Nazar beyond from the of folks giving we so of calls kind with think, then of commit that will we've model I'll to we've it of think laid anything this that we're free to as we just it that month. for over I is part And some see So, changing. haven't has paid can Page committed is of speak because,

XX X. exahash at roll exahash by of have we'll We'll July ready rock year. know, infrastructure and You this be to XX

Lucas, a as So lot typically that's I to that's like -- be, as there's realize, but in specific I market. that not movement of

of I it. don't or you Paul, So to kind Nazar add that's if anything know, think how want we there? about

Nazar Khan

add represents XX% deposit to million and a contract terahash that Yes, at to remaining the machines Lucas per $X.X is $XX just XX,XXX for that, on those machines.

said, -- available to July it's taken online of on X. by about to we've And that will remaining so as the then the machines as cover down us. really we've And contract, come X, in option And said, capital Patrick XX,XXX here, are that for Building efficiency. which effectively us, Patrick miners those

allocating per kind are about different infrastructure thinking ways we're of business looking the most it of Patrick of at to skin and which and kind some number grow of and question between effectively to sort profit cat, at in effectively, just we that ranges and comes would able $XX capital So hashboards even continuing something the a said, be to more that being miners share, machines. purchasing as in.And from terahash, as so replace

next-generation the capital out your limiting using that by the hashboards and significantly you're exists for existing swapping cost So miner the hashboard. box with

spectrum next So are terms how of a of at buildings that whole we coming looking we're there's in populate actively that up. things will those

Lucas Pipes

And chose if is another the go think deposit? deposit for option, So we it how should you transferable? to the about with

Patrick Fleury

time secure take ratably mean either machines price delivery and every then kind a I we'll No, kind know the over deposit you we of that as down take the as the work time the and delivery deposit's machines so -- machines. Lucas, those deposit down for so right? down yes, of that So, to we but future works we'll of

Operator

line Trading. the of from with comes Flynn Point and Joe question Next Research Compass

Joseph Flynn

change with require the timing the no getting or XX And a Amazon it acquisition change? the to capacity to should Do had that megawatts. terms of then like there's option about ultimately, how all if related question of I sign-off? expand Nautilus online we a at that option think does

Nazar Khan

Sure. and no The It's we conditions have. of in agreement agreement. a the landlord agreement to is new the the Amazon have, there's change terms so the we

for targeting and finalize pretty delivering quick focused Building completing We're on that. Currently Lake for turn a X we've we're on We are a currently that X working to facility. got the at designs XXXX Building Mariner. date online

slated Nautilus expansion we've XXXX. the so for And

we working that finalize site. so there put building we to design the And with a that are the up landlord for at

Joseph Flynn

CapEx touched low-cost to should like out guess hash price And if between of you I environment, and some already, mean, we on down Patrick, CapEx prioritize, needed, this how I opportunities push debt but paying flexibility? if kind the this in

Patrick Fleury

to as be, transparent, think we mean, not. try everyone which I our Yes, again, purposely knows philosophy is our many what being I do highly peers this on sure. call, of

we the so are going route. other And

-- year. on laid for that XX, So everything we've out has committed the to team management literally Page this we

million, next $XX you can so see to on $XX got around over million left that And slide, months. raise we've X the X,

okay? talking being we not context, into we pales if in deck close million Slide of no EBITDA. some that the to in why I million reason two And $XX off we absolutely year generated this $XX $XX virtually context equity in close -- the generated peers first it put our they of peers about but the of the $XX is profit. that we're again, to largest million, larger for did the our mean, generated million to million you. and XX% company. and to that, over mean, for cash to our just issued put even if $XXX only and XX even four just, than all flow XXX% year, on used our our months I generated comparison of And of that, ATM that we million Page in during pay just debt.It's $XX puts So and XX free

is so we XX dropper.These as I are companies fire equity think business eye use we here, Page on commit equity to massively own growing And and happy on the with and this because are what XX to Page other accretively a using an hose.

is profitable. not way, the And see of that, the -- and on but CleanSpark page, top so highly [half-thought] only this you'll by my

phone, point, revenue this right, be investors you're is that of I've well, ATM out profit if sanity, your go on top vanity, business only on using peers we price more in, but and you fund put of the has exahash read benefits are focused most much our to invested paying up, and ever to quote to that and putting Uber. stay profitable a profitable the or themselves the But pout even -- I ground how cash to the using of Bunch people the goes is is applaud to Revenue guys day. where your when that's by Bitcoin guess It what? is growth, HODL why they're invested. they'll strategy At Uber matter.Every to it. fund So doesn't management king. all in page, ATM will big single how some highly their

grow. how are guys to produce asked a stay are A company peers realized XQ so Bitcoin? both like which see that.So out a second some our answer. and for on recently, in there what's into bunch show see. Page actual that don't crystal telling won't guys half, you numbers halving, think XX, you markets trend I we in clear that we think need what know profit. it's of to first the the I And you in you we the profitable and cost, that some also I They right invested have in you your cost all even and put trying peers the now a we expect tools company see quarter accesses to we're need their of hash you these capital bucking to, of when a are you companies all to to are give that the to And prudently we

Operator

Next of Mike question Securities. Northland with line the Grondahl comes from

Mike Grondahl

referring Compute, Kind XX, Slide to HPC or the WULF opportunity. of

tens of to like Now this you you're business millions, millions a follow-up, of will years in business look then maybe on as center and a Paul, thinking of of what kind focused X or think X column. as you that are hundreds do this years?

Patrick Fleury

give So, thoughts and in we're Naz, come and start, you headed. don't on why I'll where then my

Nazar Khan

Sure. grow of hundreds business Mike, megawatts. we think to we this can

bit not that a of will couple out. proofing people for future use again, infrastructure, that may today, we're meets least And an the of all the and that to we specifications just more so, product our have iterations of demands that next building that GPUs at ensure towards XX-megawatt engineering that and exercise is pilot available X-megawatt designing geared the of but the come

tight.And we So at that and this a build megawatts could plus. availability again, business and power firmly zero-carbon XXX is believe over time we we low-cost the of is so that into believe scale

With today, the up. could think we we that we have XXX that build megawatts

which business as capacity to sites are We of that the number a also other at well up. to could looking build further add

really business out. in see again years we page this marketplace here So fast playing on also again, from out kind today, trying to build we think X, that's we forward the X how X, of we a are that.As somewhat of focused lays

You to their hyperscalers have a down the ability control capital the who your throw cash own again, have destiny. lot of and and try to

directly in into that power doing a number Brookfield, gigawatts I Microsoft's of gave them that will earlier see places.Again, feed of XX.X you different So the and Microsoft example needs. of

developing, companies in are they AI will enterprise to And newer of they or so can customers there's world from between. only X that a you have few that them you where it's are do that. have and likely the of today, do X going X And spectrum, or grow to something At the names in the significant. the so becoming fairly afford other end

is than for customer be we're kind and availability the really other natural to And that partner for -- tight-limited so going believe what and of or be complementary a hyperscalers, going offer to of can we we them. the

and over think real this we we're business. become So a that's do where ourselves can that positioning time

Paul Prager

look us our B.B. compute to a great high-speed it, would King used sing he I One is, to for at What very the soon. business. And it don't early I'd right? energy ways really has you in is advantage, WULF. things. These song, a business add building all like that of be Because are sites, to a that couple is water make move megawatts, that's days too think our prudent really is it's a but long-term to the The carbon access the at enabling our so of to what can take basis the on free infrastructure. low-cost permit, energy of advantage we

high-speed that's that is WULF right That -- Bitcoin a column our do on compute divisions WULF of I We said, that's X we having the would every that I about day, where the if to it's like Bitcoin this of focused get So think why all talk out mining. most see minute is see for center figure think we're likely we're will, to we're our you out mean, because the why on energy shareholders. mining. how infrastructure.I shareholders trying think to constantly, best you we located value long-term basis, and now we

are price We of on Bitcoin. very constructive the

focus We gears point be prudent the do the time, XX-megawatts, just continue be compute then Bitcoin We is do analysis, we and think then efficient to there's Particularly the to what the on dedicated switch of high-speed it of are sort column, in mining our to learn. so company. lowest right the a and most terms cost. at think at become thing to the would possible and this and we're of to it center don't in doing continue to at X-megawatts sort much

us additional much that's you. so an structure terms institutional headed.I I that, to opportunities computing that space think our think And level on you will lending think in where cap more, available of the the and again terms of a I we're think avail it's much also kind when are because high-speed that to kinder business about

that's we'll end up. where I So think

Mike Grondahl

trying follow-up. then X And connect I'm to Slide XX.

equity far of says equity of million is means column column, Slide and it initially. initially the financing and capital does center million. XX million blend Can One into the goes? that that How line for how in it you uses middle $X to and of in just the the WULF says what the speak $X $XX financing Compute

Patrick Fleury

I'll want second [ you take to on do that take million Yes, the Naz, then ]? and part first the $X

Nazar Khan

largely be pilot X-megawatt X-megawatt early capacity. budget, utilizing most the that construction we're The with of different available discussions that's around counter-parties $X X-megawatts That is number that and associated full so design a pilot. that of of in that Sure. in August capacity with million cost engineering building will we're

So of really engineering so or also and we build work scaling be budget and the design XX-megawatts includes that's to for that as up XX-megawatts, the just XX-megawatt building that again, And XX-megawatts well. design. that it's XX-megawatt scalable, where bulk designed building goes that whether the and is or

what's And budget included there the that's business. for so in that compute

Patrick Fleury

is the then right it's the which co-location, helpful your then, the answer Mike, which to build-the-suit, is question, and between the so think middle to column. column, perhaps distinguish And I

years.Whereas points that, but one-time then by obviously basically back it basis co-location, for to if and way, it's up, lot an that's the speaking, value, event an the then XX% that can basis the creates a just next A-plus get generally Mike, financeable and credit, the at corporate financing although right, little because as we've is sorry, we've of so we build-the-suit have bit that's from value far corporate, a learned that one-hit create -- public wasn't the talked in think that's gotten phrase, think down borrow a which model, hole about bit single King a doing I a what a rabbit is a So he that's but And can -- Paul's company, lot one-hit B.B. was of before, stock. we working meaning Magnificent we wonder, we that behind you entity a and XX for very company, to to XXX pursue of points we're XX% XXX big X-type credit. wonder,

And that's business, bring we our compute. got off opposed XX-ish that's but that customers help there's in third manage financing effectively of safety sense? of to all rating and Magnificent column, we finance it's have you that, that.And bunch you of in know co-location, gets parties kind so kind customers as financeable, of leverage that numbers Does that so taking as corporate there, steps but WULF middle a to profitable, very because profits, credit matures, those the us of if in also aggregate just different enterprise percent, the in the of up because of go to the sort are is same the companies initially, it's that to stock instead business then to to of as is all businesses then because sort essentially X-type the aggregate But but baby of third X once make equity, cloud parties the back you've it customer. off and customers can

Operator

comes from Papanastasiou with of the Bill question line Stifel. Next

Bill Papanastasiou

analogies on appreciate those the in this transparency dilution. funny deck and I slide

peers of appetite and any Do uptick operations? existing to HPC-AI the question, dynamics subscale For mining Lake or just would remain the Bitcoin focus plans economics. these compelling on the peers TeraWulf mining today. whether assets halving door number your will in Mariner given my be at there's of have growth Or the event, curious of following been on just on to the business? I'm hear an knocking first That

Patrick Fleury

plan focus Listen, our on we're I think to we execution have of what focused on. business and that's

focus well careful when it cost that smallest even Nautilus very just such mentioned it's it's to us, have we culturally as to sense pushing somebody fit of because us even easy. space with are focused as existing sites. our for focused earlier, per very the not at a like on team went together the finding our on element plan our have everybody that long while little on really we Mariner management We makes very, Nazar would on that probably considerate the Lake And been energy. you And and as low to off space. And execution right to shareholders.So That the the in in time ago, exahash dilution we're a to for have out said, business the that's a expansion of infrastructure. a a that focused is a be for carbon-free to everybody really XXXX, Patrick build talking energy at know,

I think likely don't I chatting. many So is dates? so. everybody that Are think sure, there

EBITDA with to the right page just debt, coming in is you side third of the you to the and page.And you'll on you are hardly of institutions, I paying stock-based put when dilution I per versus the left mean, real at the that mean, come massive are the a really see look side delivering we're then at comp, that on that the any to get we there a it very and a troubling them out our out need XX, is of us. the and transparency column world. execution, Nazar need lot just, where it again about the because appreciating we We're TeraWulf think just with there continue you if exahash Patrick. actual look join that doesn't think our then to that to to making our And talking our performance the that take shares on money shouldn't look think at message I there of And they aligned market, just under about of sense all I out level the for to they Slide take of the of when focus be us companies and we're run through make way.I the investors. They're that sort appreciation stock. and down

look that's infrastructure I at a around it. of a again big Cultural energy because issue and how is focused been So us on long sort with time.

Bill Papanastasiou

Should Shifting I color you potentially about the assume Any we table there were some Previously refinancing that that's just dipped get talks below provide appreciate the color. more hoping repayment repayment's indebtedness there? that and once to color going before completely debt gears, off plans. $XXX on the whole XXXX? million. can to happen

Patrick Fleury

Bill, Patrick. it's

we've XXXX. capital in slide XX, deck updated see said, I on, the laid our for Page out bridge on So, like you'll

says chart expansion, us some That's quickly, we're so significant flow site and laying cash there XXX L&D that electrical a take that you'll got we're free upgrades Our see to on of the all megawatts foundation, doing. page, out electrical. will that that transformers, of this debt, very bar will commitments Also on we've X. work doing some care allow expand that we've year site then for our got the Building some into line

the table debt I lot yes, a I if want markets of the yes, of mean, there.But compute our the biggest need now options or affordable flow asset power there's at generating let's is -- the I decrease are with just that view combine for mean, the ability sort on that maybe capital low a costs is I So more would profitability because then so is our look, high. the think business, cash if financing we of company to so debt financing and our think, get our

to then and that, let's debt rid future. of look to the of advantage the So get start take

Bill Papanastasiou

operating flow. on cash Congrats strong the

Operator

question a of ] private Next Rossi comes line the [ investor. Marcelo on

Unknown Analyst

mentioned runs to per earlier the call, power percentage $X.XX power but What you adjustments. kilowatt elaborate Nautilus somebody there the in is Can power, seasonality? on was on understood I seasonality that? subject cost of

Patrick Fleury

Patrick question. good It's a Fleury. it's Marcelo,

megawatts in the we fixed at Building when in online at at have that we July And to [ So is generally operation power right Mariner, Lake $X.XX. XXX have New floats. now, which XXX then the Nautilus, realize Zone X, XX ] that prices that at we megawatts And A soon XXX plant. power is that be X ISL comes power York

been Page year there both XX at sites, you generally around $X.XXX -- $X.XXX entire they our if And and for Lake think realized -- at was Mariner. power the Nautilus I so and $X.XX $X.XX.Last has $X.XXX that see look can updated Mariner Lake at at you on XXXX, we blended that year, deck, roughly of of

And so, yes, then where heating beauty of our there's real fourth gets low Lake mostly no it's be weeks little Those so winter, about XX a the quarter, demand real in humid and is weeks.But periods demand they're in be east cold really being it first really tend miles and The a the the the couple Falls. at Niagara days, function a there. that's the price for in typically Mariner it's for tends couple cooling because where a quarter summer and the of to quarter. higher power's second real to the in which shoulder months,

guidance year. yes, good for last It's $X.XXX so still the our I feel year. because we realized we expect realize So, that changed $X.XXX we to haven't and like said, we

Operator

of from with Pennington question the ahead. Capital. Next Bob Evans comes line Please go

Robert Evans

of to part follow is just of scale for HPC-AI project, but ramp clients sense think potential. but of at to up thinking the that hundreds various a I a slide, a get should looking opportunity. middle to revenue know us least you're of the trying this a scale, opportunity put at just you're Just again question, we or of sense give us millions this of the you're sense revenue some to. what this give know I should into prior

Patrick Fleury

Lake we would can X.X right, as open million. right, look, XXX megawatts I it $XXX took XXX if our -- times kind of the and multiply to X.X, think, million XXX mean, on right? Mariner, you put we page, at I Bob, So be, $XXX it's Yes,

Naz think like be hundreds earlier, of I expect to So it answered millions. we in the

very at point as there's infrastructure of of dedicating, we're Bitcoin all mentioned, think good I as that also we're well. a to know, You because capacity people as mining big business and But the sits not company that at public outside committed HPC-AI Paul to we're well. this

tuned. So this lots I just that. year think on say stay I come would There's to

Robert Evans

business cash to think of take understand of cost this that I if And we revenue is does those period and might mean just look look because like a it of that do and to trying the a per itself? my of -- I just right be divide it megawatt then and might couple understanding the it of way math that. on kind at paying but way than it's years, of ranges generated per it's Okay. if the the to both megawatt? that out, payback midpoints longer mean, for is I'm right

Patrick Fleury

Yes, so that's a really good question, Bob.

And Page So XX, we Models. been the management the we're business that the numbers says, are out -- lot a here want just on of to on I in page, Business caveat look, we've is want and because title power hardworking been business the that but I this and for of it months. we page we've -- team, put We've for been Illustrative down smart Potential studying to Bob a point X XX. see you'll this private

get So before when new over. years your a and do a XX -- into for don't lane, work get want of you run you in get there's you to you're to lot lane

we pointed infrastructure the business more out, for Nazar sorry, sweet So we technology We're business. risk because cloud people much as more that we're and capital paybacks our speaking, think also right, yet necessarily, comfortable spot, as more quicker desperate generally a column again, I service are is left GPU our so the don't GPU far are intensive taking the the much initial learning.But this business, but think focused, left I require. far column, type would people revenue,

would to that's business, to doesn't It's your to X-year it of have X-year But period. the sort -- the of payback the like a to page month XX XX stable multiples should yes, of point, business, XX that So payback. more very pretty I months conservative, our over say, view XX are business co-location good.And a down we multiple is time. here but that said, the be we bottom these think on still

on middle think either So the less we can right. column lot versus we capital, focusing the value left a more that create with or

Robert Evans

Okay.

dollar business was I should multiple build margins options EBITDA multi-hundred higher XX% value if a of it there. it, out than believe we'd million with, can call plus other So to a going that you EBITDA a you simplify lot say, have

Patrick Fleury

the well. Yes, add intensity is correct. I would And capital only thing less as

Paul Prager

I one would thing. other just say

in and up As presentation, got mentioned we're megawatt facility. WULF Compute, Nazar at XX-megawatt we've this these X a putting

come analysis massive access sort of outside putting are right that infrastructure would building and the other what experience the this we Compute vehicles. and to the up taking to do with set that -- have continuing existing WULF we going the We're on infrastructure the public of TeraWulf, we to set, to we're So large, on both of have not we Bob program and for to utilizing our refine are here. XX-megawatt

way XX-megawatts The to in right we that's the the with toe shareholders. X-megawatts the our on behalf us of water are come in and So point. the answer dipping prudent our the ensure

Robert Evans

agree and multiple, out it's model. I a more that obviously anywhere slide, to get higher business things work this with that. you on And I predictable

So agree. I

Operator

the to reached closing comments. Assad would floor turn like Thank end and now for over you. of Ladies gentlemen, to we the question-and-answer Jason I have session.

Jason Assad

Please concludes Thank you, been joining has call. our one Thank note us. [spending] operator. conference today's of for this calls. highest you That

on we for the proposed continued to support. transparency. of terawulf.com. www. hope deck, our you new again do, it and thank growing remind website be I'd like about find We everything was our insightful. it like also which So at you the Much spirit investors may in found investor will

follow please social need or anything, you remember reach to media. always please have may any us out call. If the directly and you on Operator, questions as end

Operator

teleconference. This today's you. concludes Thank

You your you Thank lines for at may your time. participation. disconnect this

TeraWulf (WULF) 13 May 242024 Q1 Earnings call transcript