TeraWulf's Bitcoin Mining Revenue Slides 69% as HPC Leasing Takes Over

TeraWulf's bitcoin mining revenue fell 69% year over year to $13.2 million in the third quarter, while high-performance computing lease revenue surged 774% to $63 million, according to the Nasdaq-listed company's earnings release on Friday. The pivot is now complete in revenue terms: HPC leasing supplied 83% of the quarter's $76.2 million in total revenue, against 14% in the same period last year.

The numbers describe a company in mid-transition. Total revenue rose 51% year over year, yet the operating loss widened to $88.2 million from $24.7 million, and adjusted EBITDA slipped to negative $12.8 million. TeraWulf still reported $709.9 million in net income attributable to shareholders — but $728.4 million of that came from a non-cash gain on changes in the fair value of warrant and derivative liabilities. Strip that out and the underlying operation lost money.

What does this change for TeraWulf's business model?

In practical terms, TeraWulf has ceased to be a miner that hosts some compute and become a data center landlord that runs a residual mining operation. Mining revenue of $13.2 million per quarter is roughly $4.4 million a month — a fraction of what the company's contracted AI leases are already producing. The margin profile has inverted accordingly: revenue is growing, but the costs of building and commissioning hyperscale capacity now outrun what the operating assets bring in.

The balance sheet supports the buildout. TeraWulf held approximately $2.4 billion in cash, cash equivalents and restricted cash at the end of the quarter.

The Anthropic anchor and the gigawatt pipeline

At its Lake Mariner site in New York, 102 MW of critical IT capacity was generating revenue as of September 30, with another 336 MW under construction. One data center building there is expected to begin generating rent in the fourth quarter, with a further building following in early 2027.

The centerpiece remains the 20-year lease with Anthropic covering roughly 401 MW of critical IT capacity at TeraWulf's Justified campus in Kentucky — approximately $19 billion in contracted revenue over the initial term. That is more than 20 times the company's entire quarterly revenue base, spread across two decades, or close to $1 billion per year in contracted value.

Two developments this week de-risked execution. TeraWulf announced a Google credit backstop for project financing supporting the Anthropic lease, and signed a definitive engineering, procurement and construction agreement with Fluor Enterprises covering three data center buildings. First phases are scheduled for delivery in late 2027.

At its Muskie campus in Kentucky, contracted power capacity has increased from 500 MW to 1 GW, pending regulatory approval. Across the portfolio, management is targeting another 250 MW to 500 MW of contracted critical IT capacity each year.

"Lake Mariner is delivering contracted capacity and generating revenue, 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," Chairman and CEO Paul Prager said in the earnings release.

Execution risk now sits on delivery timelines

What does this change for practitioners watching the miner-to-HPC conversion trade? TeraWulf has moved from a thesis stock to an execution story. The customer is signed, the credit support is in place, and the EPC contractor is named. The variables that remain are construction schedules, regulatory sign-off on the Muskie expansion, and whether the 2027 delivery windows hold.

Investors marked the print positively in early trading: shares rose 8.1% to $10.90 pre-market on Friday. The next checkpoints are concrete — first rent from the new Lake Mariner building in the fourth quarter and the late-2027 delivery of the initial Anthropic phases.