TeraWulf (WULF) Q3 2026 earnings review
TeraWulf's AI lease revenue doubles, and Google backs Kentucky build
TeraWulf's shift from bitcoin mining to artificial intelligence data centers is now driving rapid top-line growth, even as heavy construction and overhead costs keep operating cash flow negative. Third-quarter revenue rose 51% from a year ago to $76 million because AI lease sales nearly doubled from last quarter to $63 million — well above what the company's 102 megawatts of active capacity pointed to by our math. Chief executive Paul Prager also locked in a Google financial guarantee and engineering firm Fluor to build the $19 billion Anthropic campus in Kentucky.
| Total revenue | $76.2M +51% from a year ago (+70% from Q2) |
|---|---|
| AI data center lease revenue | $63.0M +97% from last quarter (83% of sales) |
| Adjusted EBITDA, excluding one-offs | -$12.8M -$18.3M last quarter |
| Contracted AI capacity | 839 MW 102 MW operating, 737 MW in construction |
⚖️ Verdict: 🟢 Bullish
The story got better because locking in Google's credit backing and Fluor's construction contract removes the biggest financing and execution doubts around the 401-megawatt Anthropic lease. In addition, collecting the first $250 million from selling the Texas joint venture and doubling contracted power at the Muskie site to 1 gigawatt bolsters the pipeline. One caution: active capacity at Lake Mariner stayed at 102 megawatts as the fourth building's opening shifted into November and December, and cash overhead continues to run hot.
The question now is whether TeraWulf can deliver the remaining 336 megawatts at Lake Mariner over the next two quarters without further schedule delays and turn operating cash flow positive. Bulls point to 97% of Lake Mariner construction costs being locked in under contract, while sceptics point to a history of slipped opening dates and rising pre-revenue expenses. The year-end megawatt count and the debt terms for the Kentucky build will tell.
🐂 Bull Case
Google and Fluor Lock In the Anthropic Build
TeraWulf develops and leases power-backed data centers for artificial intelligence and high-performance computing (HPC). Last quarter, it signed AI developer Anthropic to a 20-year, $19 billion lease for 401 megawatts (MW) of computing capacity at its Justified campus in Kentucky, but it had not yet named the financial guarantor or the builder.
On November 4, the infrastructure builder announced a "Google Credit Backstop for Project Financing in support of Anthropic’s lease and a definitive EPC agreement with Fluor Enterprises, Inc. covering three data center buildings". Chief executive Paul Prager said "Justified has the customer, credit support and construction framework to move forward at scale, and Muskie gives us a contracted path to a gigawatt of power".
This agreement resolves two major overhangs. Backing from Google's parent Alphabet allows the US group to raise project debt for the multi-billion-dollar Kentucky build just as it did in New York, while hiring Fluor puts a global engineering firm in charge of delivering the three buildings between late 2027 and the second quarter of 2028.
What to watch: the closing and interest rate of the Justified project debt financing over the next two quarters. Closing that debt without issuing new common stock will prove the Google guarantee works as intended.
AI Data Center Leases Now Drive 83% of Revenue
TeraWulf is replacing its original bitcoin mining business with 10-to-20-year leases for AI data centers at its Lake Mariner campus in New York. Once the 42 MW third building finished commissioning in early July, the site ran at 102 MW of active computing capacity for the entire third quarter.
- AI data center lease revenue: $63.0 million, up 97% from last quarter and accounting for 83% of total sales
- Base rent revenue (excluding power pass-through and tenant upgrades): $46.0 million, up 71% from $26.9 million last quarter
- Above what the active capacity pointed to: total lease sales beat the $43–49 million range implied by 102 MW by our math
The jump shows what happens when completed buildings bill for a full three months. Another 336 MW is under construction across buildings four and five at Lake Mariner, which the company expects will push annual campus net operating income — lease revenue minus direct site operating costs — to about $700 million once running.
What to watch: fourth-quarter base rent revenue as the 168 MW fourth building comes online in phases during November and December. A step-up above $46 million will show how much of that building began billing before year-end.
Abernathy Sale and Utility Deal Fund the Pipeline
Building power-heavy campuses across New York, Kentucky and Maryland requires billions of dollars before tenants pay rent. Finance chief Patrick Fleury said TeraWulf "further strengthened our financial flexibility through the Abernathy monetization and expansion of our revolving credit facility". Selling its 50.1% stake in the Abernathy Texas joint venture brought in $250 million in cash this quarter, with $150 million due by December and about $130 million due by April 2027.
Lenders also expanded the company's revolving credit line from $250 million to $400 million after quarter-end, with an option for $150 million more. In eastern Kentucky, an October agreement with Kentucky Power Company doubled contracted power at the Muskie site from 500 MW to 1,000 MW (1 gigawatt) and pulled the second 500 MW phase forward to 2029 from 2030.
What to watch: receipt of the $150 million Abernathy payment by December 31, 2026 and Kentucky Public Service Commission approval for the 1 GW Muskie power agreement. Those milestones supply both the cash and the approved power for next year's leasing goal.
🐻 Bear Case
Lake Mariner CB-4 Slipped Into Late Q4
"Third-quarter results reflect strong execution across the business," chief executive Paul Prager said. Yet active computing capacity at Lake Mariner ended September at 102 MW — the exact level it reached in early July when the third building opened.
Earlier this year, the developer planned to finish the 168 MW fourth building (CB-4) in the third quarter and the 168 MW fifth building (CB-5) in the fourth quarter. Last quarter, management shifted to turning on individual data halls one by one, aiming for the first CB-4 hall in late September. Now the presentation schedules CB-4 for phased delivery across November and December 2026, while CB-5 is targeted for the first quarter of 2027.
Every building at Lake Mariner has moved later at least once, so construction timelines remain a key risk as the group begins a simultaneous 401 MW build in Kentucky. Because roughly 97% of Lake Mariner construction spending is now locked in under contracts, the cost stays inside the $8–10 million per MW plan, but later openings still delay incoming rent.
What to watch: active megawatts generating rent at Lake Mariner on December 31, 2026. Anything short of 270 MW (the current 102 MW plus all 168 MW of CB-4) means part of CB-4 slipped into 2027.
Development Costs Keep Operating Cash Losses Deep
TeraWulf highlights a $38.5 million quarterly segment profit for its AI leasing business, up from $21.4 million last quarter. To reach that figure, however, the company adds back $18.0 million spent developing uncontracted sites and $11.1 million of pre-revenue operating costs at Lake Mariner. Including those real outlays, total company revenue minus cost of revenue and site operating expenses was $11.6 million, or 15.2% of sales by our math.
- Site operating expenses (including related party): 51.8% of revenue, up 42.9 percentage points from 8.9% a year ago
- Selling, general and administrative overhead (including related party): 75.0% of revenue ($57.1 million), up 42.0 percentage points from a year ago
- Adjusted EBITDA (operating profit before depreciation, stock compensation and one-offs): a loss of $12.8 million, compared with an $18.1 million profit a year ago
Removing $30.0 million of stock-based compensation still leaves $27.1 million of cash overhead in the third quarter by our math. That pushes nine-month cash overhead to about $82 million, leaving only $18 million in the fourth quarter to stay inside the $75–100 million full-year target.
What to watch: fourth-quarter Adjusted EBITDA once CB-4 begins paying rent. Turning Adjusted EBITDA positive will show that new lease revenue is finally outgrowing site development and corporate overhead.
Dilution and Debt Climb With the Build-Out
TeraWulf spent $852 million on property, plant and equipment in the third quarter alone by our math, bringing nine-month capital spending to $2.23 billion. Because operations also used $25 million in cash during the quarter, net debt — total debt minus cash and restricted cash — rose by $700 million from last quarter to $3.4 billion. Quarterly interest expense jumped more than fivefold from a year ago to $53.6 million.
Shareholders are also absorbing steady dilution. Weighted-average diluted shares rose 43% from a year ago to 573.6 million after spring stock offerings and employee equity grants. Including 77.7 million warrants (mostly penny warrants held by Google) and 32.8 million unvested employee awards, the presentation's capitalization table shows at least 611 million diluted shares before any convertible debt turns into stock.
What to watch: the debt-to-equity funding split for the 401 MW Justified campus in Kentucky. At $8–10 million per MW, that site costs $3.2–4.0 billion, testing whether project debt and Abernathy sale proceeds can cover the bill without another stock offering.
Risks this quarter didn't answer
Several standing regulatory, timeline and governance questions received no update in the third-quarter earnings release or presentation and await the full quarterly filing.
- Chesapeake Data closing: federal energy regulators approved the Maryland power plant purchase in July, but the slides still list the deal as pending closing and state regulatory approvals.
- Lake Hawkeye permitting and New York rules: initial operations at the 320 MW Lansing, New York site remain slated for 2029, with no update on local planning reviews.
- Related-party payments: related-party operating and overhead lines totaled $2.1 million in Q3 ($20.7 million year-to-date), while updates on the capex-linked related-party trust await the 10-Q footnotes.
💲 Other KPIs
Total cash, cash equivalents and restricted cash fell by $694 million from last quarter's $3.05 billion as the builder poured $852 million into data center construction during the third quarter, partly offset by the first $250 million payment from selling the Abernathy joint venture.
Reported net income swung from a $939.9 million loss last quarter to a $709.9 million profit. Both swings were driven by accounting marks on Google's warrants ($728.4 million non-cash gain in Q3) plus a $95.0 million gain from selling Abernathy; excluding those two items, the company lost $113.5 million by our math.
Digital asset revenue dropped 69.5% from $43.4 million a year ago as the group dismantled mining rigs to free up power for AI leases, though it edged up 3.2% from last quarter and generated a $1.0 million segment profit.
🔮 Guidance
Unchanged. Management reaffirmed that Lake Mariner construction continues to progress within its $8–10 million cost plan per megawatt of computing capacity. About 97% of total construction spending for buildings two through five is now committed under contract, up from 90% last quarter, with about $1.0 billion of cash capex remaining to be spent.
Unchanged. The developer reaffirmed its multi-year target of signing 250 to 500 MW of new AI data center leases each year. With 401 MW already signed with Anthropic in 2026, the next test of this pace is securing a tenant for the expanded 1,000 MW Muskie campus in Kentucky during 2027.
Pushed back slightly. While the release still describes CB-4 as on track for fourth-quarter delivery, the presentation specifies November and December 2026 for CB-4's 168 MW phased rollout, meaning no new megawatts came online in September as previously planned. CB-5's 168 MW remains slated for the first quarter of 2027.
Pulled forward at Muskie. At Justified, Fluor will deliver the three buildings in phases: 137.6 MW in Q4 2027, 137.6 MW in Q1 2028, and 125.6 MW in Q2 2028. At Muskie, the amended utility agreement keeps the first 500 MW phase in Q4 2028 and advances the second 500 MW phase by a full year to 2029.
❓ Key Questions
What are the cost and financing terms for Justified?
TeraWulf signed Fluor as builder and Google as credit guarantor for the 401 MW Anthropic campus, but the capital structure table still lists Justified's budget, debt and remaining spend as 'TBD'. Investors need the cost per MW and debt-to-equity split.
How much of CB-4 will pay rent before year-end?
With the 168 MW CB-4 building now scheduled for phased delivery across November and December, management has not stated how many megawatts will finish commissioning in each month or when the revolver's $400 million expansion triggers.
Does the $75–100 million overhead target still stand?
Selling, general and administrative expense excluding stock compensation was $27.1 million in Q3, bringing the nine-month total to about $82 million by our math. Staying under $100 million for the year would require a one-third cut in Q4.
When will the Chesapeake power plant acquisition close?
Federal regulators approved the Morgantown, Maryland purchase in July and management previously expected a second-half 2026 close, yet the presentation still marks the 800 MW site as pending closing and state approvals.