Nautilus Cryptomine Facility Divestment and Expansion at Lake Mariner

TeraWulf, a vertically integrated owner and operator of digital infrastructure, has been focused on expanding its operations at the Lake Mariner Facility while divesting its interest in the Nautilus Cryptomine Facility.

Prior to October 2024, TeraWulf operated bitcoin mining activities at the Nautilus Cryptomine Facility, which was a joint venture with Talen Energy Corporation. The Nautilus facility was powered by zero-carbon nuclear energy and had 200 MW of bitcoin mining capacity. TeraWulf held a 25% equity stake in the joint venture.

In October 2024, TeraWulf sold its entire 25% equity interest in Nautilus to Talen Member. This allowed TeraWulf to consolidate its operations and reinvest capital into the expansion of its wholly owned Lake Mariner Facility.

The Lake Mariner Facility, located in Barker, New York, is strategically situated on the site of a former coal-fired power plant. As of December 31, 2024, the facility was operating 195 MW of bitcoin mining capacity, with an additional 50 MW under construction and expected to come online in the first half of 2025.

In addition to bitcoin mining, TeraWulf is developing high-performance computing (HPC) data centers at the Lake Mariner Facility to provide hosting services for Core42, a G42 company. In December 2024, TeraWulf signed multi-year data center lease agreements with Core42 to lease 72.5 MW of HPC hosting capacity, with an option to expand by an additional 135 MW by March 2025. This expansion into HPC hosting diversifies TeraWulf’s revenue streams and leverages its expertise in power infrastructure and digital asset mining.

Bitcoin Mining Performance and Efficiency

TeraWulf’s bitcoin mining operations are focused on maximizing efficiency and profitability. As of December 31, 2024, the company owned approximately 62,000 miners, of which 58,800 were operational at the Lake Mariner Facility. The company’s miners had an average energy efficiency of 19.8 joules per terahash (j/th), which is a key metric for measuring the energy consumption of mining rigs.

In 2024, TeraWulf’s combined average operating hashrate, which represents its share of the total computing power on the bitcoin network, was 9.7 exahashes per second (EH/s), or approximately 1.4% of the global hashrate. This translated to approximately 6 bitcoin mined per day.

The cost of mining each bitcoin, including energy costs and other direct mining expenses, was $25,268 in 2024, compared to $8,705 in 2023. This increase was primarily due to the bitcoin halving event in April 2024, which reduced the block reward by 50%, as well as a near doubling of the network difficulty. These factors were partially offset by growth in TeraWulf’s average operating hashrate and an increase in the average market value of each bitcoin mined.

Energy costs are the most significant expense in bitcoin mining, accounting for 40.1% and 29.4% of the total value of bitcoin mined in 2024 and 2023, respectively. TeraWulf actively manages its energy consumption, optimizing for profitability by curtailing operations during periods of high power prices or participating in demand response programs.

Financial Performance and Outlook

TeraWulf’s revenue for the year ended December 31, 2024 was $140.1 million, an increase of $70.9 million compared to 2023. This was primarily due to an increase in the average price of bitcoin during 2024 to $65,824, compared to $28,788 in 2023, as well as an increase in mining capacity at the Lake Mariner Facility.

Cost of revenue (exclusive of depreciation) increased by $35.3 million in 2024, primarily due to the increase in mining capacity and higher power prices. Operating expenses, including selling, general and administrative expenses, increased by $36.3 million, driven by higher stock-based compensation, employee costs, and other public company expenses.

Depreciation expense increased by $31.4 million in 2024, reflecting the expansion of the company’s mining infrastructure. TeraWulf also recorded a $17.8 million loss on the disposal of property, plant, and equipment, primarily related to the replacement of older miners.

Interest expense decreased by $15.0 million in 2024, as TeraWulf repaid its Term Loans ahead of maturity in July 2024. The company subsequently issued $487.1 million in convertible senior notes due 2030, which carry a 2.75% annual interest rate.

TeraWulf reported a net loss of $72.4 million for the year ended December 31, 2024, compared to a net loss of $73.4 million in 2023. The company’s Adjusted EBITDA, a non-GAAP measure, was $60.4 million in 2024, up from $31.9 million in 2023.

As of December 31, 2024, TeraWulf had $274.1 million in cash and cash equivalents, $229.6 million in working capital, and $244.4 million in total stockholders’ equity. The company’s strong liquidity position and access to capital markets provide it with the resources to continue investing in the expansion of its digital infrastructure and HPC hosting capabilities.

Outlook and Strategy

Looking ahead, TeraWulf’s strategy is focused on leveraging its owned and scalable digital infrastructure to drive revenue and profitability through both bitcoin mining and HPC hosting. The company’s transition into HPC hosting, exemplified by the agreements with Core42, allows it to capitalize on the growing demand for AI, machine learning, and cloud computing workloads, while optimizing its power utilization and digital infrastructure.

By prioritizing cost-efficient power utilization, sustainability, and scalable infrastructure, TeraWulf aims to maximize value creation and adapt to the evolving landscape of digital asset mining and AI-driven computing. The company remains focused on expanding its infrastructure, optimizing operations, and strengthening its competitive advantage in both bitcoin mining and HPC hosting.

The successful divestment of its Nautilus Cryptomine Facility interest and the expansion of the Lake Mariner Facility, combined with the new HPC hosting agreements, position TeraWulf for continued growth and diversification of its revenue streams. As the company navigates the dynamic digital infrastructure and computing sectors, its commitment to sustainability and operational efficiency will be key to driving long-term value for its shareholders.