TERAWULF INC. files 10-Q: quarterly report (10-Q)

Overview

We are a vertically integrated owner, developer, and operator of digital infrastructure assets in the United States, purpose-built to support HPC workloads, including AI, machine learning, and advanced cloud applications.

During the three months ended March 31, 2026, HPC leasing revenue represented a majority of total revenue for the first time, reflecting the continued ramp of long-term contracted capacity at the Lake Mariner Data Campus.

The Company has undergone a deliberate strategic transition toward HPC hosting as its primary business. While TeraWulf historically operated bitcoin mining facilities and leveraged flexible compute loads to support early infrastructure development, the Company has begun to curtail and repurpose portions of this infrastructure to support HPC development, and going forward capital allocation, development activities, and operating focus are centered on HPC data center development, long-term hosting arrangements, and infrastructure supporting AI-driven compute workloads.

Our strategy is grounded in controlling infrastructure at utility scale and pairing compute-optimized facilities with reliable, long-duration power resources. By controlling land use through ownership or long-term ground leases, together with interconnection rights, electrical and cooling infrastructure, and, where appropriate, on-site generation, the Company delivers resilient, cost-efficient capacity to hyperscale and enterprise customers under multi-year hosting arrangements. These hosting arrangements are typically structured as long-term data center leases, generally ranging from 10 to 25 years, and in certain cases benefit from investment-grade credit support, enhancing the durability and finance ability of contracted revenues. These arrangements are expected to provide long-term revenue visibility and support project-level financing as the platform scales.

This infrastructure-first approach enables TeraWulf to serve Tier-1 counterparties while maintaining operational control, development flexibility, and disciplined capital allocation.

The Company’s platform is differentiated by long-term control of utility-scale infrastructure, deep in-house power and grid expertise, and a scalable development model supported by long-term, credit-enhanced customer contracts.

Strategy Execution and Capital Allocation

Management’s execution of the Company’s strategy is focused on converting advantaged infrastructure positions into long-dated, contracted HPC capacity. This includes the phased conversion of existing infrastructure, where appropriate, to support HPC workloads. This execution model emphasizes vertical integration, long-duration customer contracts supported by credit enhancement, and phased development aligned with customer deployment schedules and power availability.

A core element of this approach is infrastructure control. By retaining control over land use, interconnection rights, electrical and cooling systems, and on-site generation where appropriate, the Company is able to manage development risk, optimize capital deployment, and maintain operational oversight throughout the lifecycle of its facilities. Management believes this approach reduces execution risk relative to third-party development models and supports infrastructure-style returns.

The Company’s contracting strategy prioritizes multi-year hosting arrangements with credit-supported counterparties, which reduces exposure to commodity-driven revenue streams, including bitcoin price volatility, as the Company’s revenue mix continues to shift toward contracted HPC leasing. These arrangements provide long-dated revenue visibility, support project-level financing, and reduce cash flow volatility as the platform scales. Credit enhancement associated with certain customer contracts has been a key factor in accelerating development timelines and enabling third-party financing.

Each campus is designed for modular, multi-phase expansion. Initial phases deliver near-term contracted capacity, while subsequent phases are aligned with customer deployment schedules and infrastructure readiness, including power availability and interconnection timing. Management believes this phased approach allows the Company to scale efficiently while maintaining capital discipline.

While the Company currently derives a significant portion of its revenue from bitcoin mining, HPC hosting is now the Company’s primary growth driver and operating focus.

Strategic Transactions Acquisition of Beowulf E&D

On May 21, 2025 (the “Acquisition Date”), the Company acquired 100% o f the membership interests in Beowulf Electricity & Data LLC, Beowulf E&D (NY) LLC and Beowulf E&D (MD) LLC (collectively, “Beowulf E&D”). Additional detail regarding the consideration paid and contingent consideration associated with the Beowulf E&D acquisition is included in Note 3 to the condensed consolidated financial statements.

The acquisition materially expanded the Company’s internal capabilities across power infrastructure development, site operations, engineering, and project execution. Approximately 94 employees transitioned to the Company as part of the transaction. Management believes this acquisition strengthened operational integration and execution capability as the Company scales its HPC platform.

Cayuga Site Ground Lease

On August 12, 2025, the Company entered into a long-term ground lease for approximately 183 acres in Lansing, New York. Upon completion of permitting and site development, the Cayuga Site has the potential for up to 400 MW of gross capacity, supporting approximately 320 MW of critical IT load. The Cayuga Site provides an additional anchor location with existing interconnection and supporting infrastructure and represents a key component of the Company’s forward development pipeline.

Abernathy Joint Venture

On October 27, 2025, the Company entered into an amended and restated limited liability company agreement governing the Abernathy Joint Venture. The Company holds a 50.1% equity interest in the joint venture. The Abernathy HPC Campus is designed for 168 MW of critical IT load, representing the full build-out of the site. The campus is 100% pre-leased to Fluidstack under a 25-year data center sublease with contractual rent escalators and options for term contraction. Lease obligations are supported by investment-grade credit enhancement provided by Google, materially strengthening the credit profile of the contracted revenues and facilitating third-party debt financing.

Management believes the Abernathy Joint Venture reflects the extension of the Company’s commercial relationship with Fluidstack, supported by continued credit enhancement from Google, to an additional site.