TERAWULF CFO Q&A | Q3 EARNINGS & SITE UPDATES | TOP AI STOCKS TO WATCH IN 2026 | WULF STOCK - TERAWULF INC

Explicit Guidance:

• FY2025 revenue run rate expected to exit Q1 at approximately $700 million.
• Capital expenditure (CapEx) guidance for the Lake Mariner project remains in the range of $8–10 million per megawatt.
• Estimated remaining CapEx for Lake Mariner is ~$1 billion, with ~$336 million (approx. 33%) committed, leaving ~2/3rds under time-and-materials contracts.
• Projected leverage for Wolf Compute post-Q1 FY2026: 5x (vs. 10–15x for peers), amortizing by 0.5–0.75x annually.

Business-Segment Outlook:

• CB3 (Anthropic): Fully online as of early July; 42 MW capacity with two data halls, driving Q3 HPC rent to $46 million (up 100% QoQ).
• CB4 (Google Backstop): Four data halls (168 MW total); Data Halls 3 and 4 coming online "imminently" in the current quarter, with Data Halls 1 and 2 following; lease commencement and amortization expected to trigger this quarter.
• CB5 (Next Gen): Mirror image of CB4, expected to come online by the exit of Q1 FY2026.
• Muskie: Targeting a 1 GW (1,000 MW) site in Kentucky; expansion from 500 MW to 1,000 MW involves a regulatory filing with the Kentucky Public Service Commission in 3–4 weeks.
• Hawesville: Secured Google credit backstop for Anthropic's three leases; backstop kicks in at lease commencement and includes mandatory lease assumption for first 6 years if Anthropic defaults.
• Wolf Compute: Positioned to fund parent growth by pulling equity/returns, potentially monetizing minority interests if market multiples (25x EBITDA) justify it.

Market and Competitive Outlook:

• Demand: Described as "incredibly robust" with a historic capex cycle; constrained by infrastructure/building speed rather than demand.
• Pricing: Anticipates "every open megawatt of power in 2027 and 2028 will get signed."
• Valuation Logic: Compares TerraWolf to Digital Realty and Equinix (trading at ~5% cap rate); suggests superior fundamentals but acknowledges longer build times require higher discount rates.
• Competitive Strategy: Avoids competing with hyperscalers (Amazon, Google, Meta, NVIDIA) in capital costs; strategy focuses on "toll road" model with investment-grade counterparties to match their balance sheets.
• Alternative Models: Viewing "powered land lease" models (e.g., Riot/AI startups) with skepticism; notes pre-financing yields often ignore capital structure costs (interest during construction) which can increase financing costs by 10–12%.

Macro / Industry Outlook:

• Cost of Capital: Notes 5, 10, and 30-year treasuries exceeding 5% for the first time in 26 years, driving wider credit spreads.
• Inflation/Economy: Acknowledges inflationary pressure on labor, specifically "parabolic" increases in electrical labor costs.
• Regulatory: Welcomes increased regulation in data center permitting (e.g., New York, Kentucky) as it "clears out the riffraff" and protects ratepayers.
• Geopolitics: Frames data center build-out as a "sovereign race" for the US, necessitating collaboration with communities and local governments.

Strategic Initiatives:

• FLUOR Partnership: Engaged FLUOR ($7B cap, BB-rated) as EPC contractor for Lake Mariner/Hawesville to utilize their guaranteed max price contracts and workforce capabilities, reducing execution risk.
• AEP Partnership: Collaborating with AEP (80B utility) to fund interest during construction for new CCGT power plants to secure the second 500 MW at Muskie.
• Equity Management: Zero interest in issuing equity near current share prices; prioritizing internal options (cash on hand, asset monetization of Wolf Compute, customer prepayments) to fund Muskie and other projects.
• M&A/Divestitures: Exited Abernathy JV (Texas) to recycle capital into wholly-owned sites; not currently seeking new M&A until Lake Mariner and Hawesville are fully financed and operational.

Risks and Headwinds to Outlook:

• Labor Shortages: Severe lack of electrical labor causing parabolic cost increases, though currently mitigated at Lake Mariner due to lack of competing regional projects.
• Execution Risk: Long construction timelines (18–24 months) require accurate discounting of future revenues; "indigestion" in market valuation due to slow capital deployment compared to tech sector speeds.
• Financing Spreads: Rising credit spreads for hyperscalers could impact project economics if not mitigated by tenant agreements (e.g., rent adjustments for higher coupon costs).
• Regulatory/Community Pushback: Potential NIMBY concerns regarding water usage (corrected via education: 1/100th of golf course usage) and noise (mitigated by sound containment), though generally managing these through transparency.

Management Tone on the Future:

• Confidence: High confidence in cost discipline (staying within $8–10M/MW guidance despite labor inflation) and asset monetization.
• Defensiveness: Strong emphasis on balance sheet strength ("fortress balance sheet") and "cash is king" philosophy; personally reinvesting executive capital at $17.60/share.
• Timeline: Views current market volatility as a "recalibration" rather than a bubble; expects immediate cash flow inflection as major projects (CB4, CB5) come online in late FY2025/early FY2026.
• Growth: Targeting an annual build rate of 250–500 MW, extending through 2030, contingent on the successful execution of current pipeline.

Miscellaneous:

• Community Relations: Active engagement in local communities (Ithaca, Kentucky) including funding fire department equipment, property tax contributions, and public education on environmental impact (water/noise).
• Insider Ownership: Management team owns ~25% of equity; described as "highest owned" board/management team.
• Water Usage: First injection at La Lupa was 10,000 gallons (vs. 20–30k for a pool), with closed-loop systems using 1/100th of a golf course's annual water.