WULF
TL;DR Overview
Core Insight: TeraWulf’s edge is a hard-to-replicate power-and-infrastructure platform in Upstate New York that marries very low-cost, predominantly zero‑carbon energy with hyperscale-ready sites and blue‑chip counterparties. Dual 345 kV transmission, closed‑loop water cooling, and ultra‑low‑latency fiber underpin AI/HPC‑grade facilities, while recent financing and security structures add institutional credibility.
Key Opportunity: Long‑dated, contract‑backed AI/HPC colocation at the Lake Mariner campus is scaling from tens of megawatts to several hundred, with $6.7 billion of contracted revenue today and up to $16 billion with extensions tied to Fluidstack leases, plus existing Core42 agreements. The ramp through 2026 converts a bitcoin‑heavy profile into a durable, high‑margin colocation business.
Primary Risk: Execution and leverage risk. The company has priced $3.2 billion of 7.750% senior secured notes due 2030 to fund expansion; pro forma interest and construction schedules must be supported by timely tenant deployments and on‑budget delivery, while legacy exposure to bitcoin mining adds near‑term cash flow volatility.
Urgency: The capital stack and project plan have just crystallized: the $3.2 billion secured notes are priced for an expected October 23, 2025 close, Google has increased its backstop to ~$3.2 billion and pledged TeraWulf warrants as collateral prior to completion, and HPC revenue recognition began in 2H 2025 with a steep build into 2026.
1. Executive Summary
TeraWulf is transitioning from a primarily bitcoin‑mining operator to a scaled, high‑margin AI/HPC colocation platform anchored at its Lake Mariner campus in Barker, New York. The company has secured anchors across two customer sets—Core42 for 72.5 MW beginning in 2025 and Fluidstack for more than 200 MW initially, now expanded with a CB‑5 building for an additional 160 MW in the second half of 2026. This progression has translated into multi‑billion dollar contracted revenue visibility: $6.7 billion today and up to $16 billion with lease extensions under the Fluidstack structure, alongside the earlier Core42 program that began contributing in 2025. The long‑term thesis is straightforward: convert a power‑advantaged footprint and proven data center delivery into durable, contract‑based cash flows that are less exposed to bitcoin price cycles.
The financing blueprint to realize this plan is now largely in place. After a $500 million 2.75% convertible due 2030 (October 2024) and a $1.0 billion 1.00% convertible due 2031 (August 2025), WULF Compute has priced $3.2 billion of 7.750% senior secured notes due 2030 at par to fund a substantial portion of the Lake Mariner buildout. These notes are secured by first‑priority liens on substantially all assets of WULF Compute and its guarantors and carry additional structural support via a designated lockbox tied to Fluidstack USA I Inc. cash flows and, prior to completion, a pledge by Google LLC of warrants to purchase TeraWulf common stock. TeraWulf itself provides customary completion guarantees to ensure the data center expansion is delivered on time.
Strategically, the company’s competitive moat is its integrated energy and infrastructure platform. Lake Mariner’s dual 345 kV interconnects, closed‑loop water cooling, and fiber routes serve high‑density GPU clusters, while power sourcing targets sub‑$0.05/kWh at its new Cayuga site under an 80‑year ground lease that can scale to 400 MW. As the HPC portfolio ramps, management is guiding toward site‑level margins characteristic of colocation economics (Fluidstack projections contemplate 85% site NOI margins), which should reshape the financial profile that, in early 2025, still reflected bitcoin halving‑driven cost pressure and a net loss. The company’s near‑term focus remains scheduling, power procurement discipline, and tenant coordination to convert the contracted backlog into cash earnings through 2026.
2. Trading Analysis
The equity story is evolving from a volatile, bitcoin‑beta profile to a contracted‑revenue infrastructure narrative, but the capital structure is now more complex. Convertible debt was layered in two tranches: $500 million at 2.75% due 2030 (accompanied by capped calls with a $12.80 cap) and $1.0 billion at 1.00% due 2031 (capped calls with a cap price of $18.76 and an initial conversion price of approximately $12.43 per share). The capped calls are designed to mitigate dilution to varying price thresholds, aligning equity protection with growth financing.
The latest inflection is the pricing of $3.2 billion of 7.750% senior secured notes due 2030 at par. If closed as expected on October 23, 2025, this materially increases fixed obligations but is secured by first‑priority liens on substantially all assets of WULF Compute and its guarantors (La Lupa Data LLC, Akela Data Holdings LLC, and Akela Data LLC), a pledge of certain equity interests, and a designated lockbox account of Fluidstack USA I Inc. Prior to completion, Google LLC will also pledge warrants to purchase TeraWulf common stock as collateral, an unusual and notable credit enhancement signaling strong counterparty alignment with the build schedule. TeraWulf’s completion guarantees further de‑risk lender exposure but increase parent‑level obligations if schedules slip.
From an equity holder’s perspective, recent and ongoing share repurchases signal management’s confidence and willingness to balance growth with capital returns: a $200 million program authorized in October 2024 led to over $150 million repurchased by year‑end 2024, with an additional $33 million repurchased by May 2025. These buybacks partially offset potential dilution from the convertibles and future warrant exercises. The interplay between rapid capex deployment, rising contracted revenue, and leverage creates a catalyst‑rich setup: execution on 2025–2026 HPC ramps and the Fluidstack CB‑5 expansion are the key milestones equity markets will monitor.
3. Team Overview & Governance
Leadership continuity and governance streamlining have progressed alongside the strategic pivot. Paul Prager continues to lead as Chief Executive Officer, with Patrick Fleury as Chief Financial Officer and Nazar Khan as Chief Technology Officer. Sean Farrell, promoted to Chief Operating Officer in November 2024, brings deep operational experience from his earlier role overseeing data center operations; his elevation aligns operating accountability with the 2025–2026 build plan. On the strategic side, Chief Strategy Officer Kerri Langlais has been central to site expansions and the Cayuga ground lease.
Governance has been simplified and strengthened. The May 2025 acquisition of Beowulf Electricity & Data LLC eliminated a related‑party structure, consolidated 94 employees under one employer, and aimed to enhance transparency and capital markets access. The Cayuga ground lease was vetted by an independent Board committee to align the transaction with shareholder interests. Taken together, these steps suggest a board and management team that are aligning organizational structure with the demands of a scaled, third‑party colocation model.
4. Business Model
TeraWulf operates a dual‑engine model: legacy proprietary bitcoin mining and a rapidly scaling high‑performance computing colocation platform. The colocation engine is anchored by multi‑year contracts with Core42 and Fluidstack. Core42’s initial 72.5 MW tranche began contributing in 2025, with optionality for additional capacity. Fluidstack’s agreements originally covered over 200 MW and have expanded with the CB‑5 building for another 160 MW, bringing Fluidstack’s total contracted critical IT load at Lake Mariner to roughly 360 MW. These long‑term leases translate into substantial revenue visibility—$6.7 billion under current contracts that could rise to roughly $16 billion with lease extensions—and are paired with projected site‑level NOI margins of approximately 85%, reflecting the economics of power‑efficient, high‑density hosting.
The model’s differentiator is structural cost advantage and scale. Lake Mariner’s abundant and predominantly zero‑carbon power, water‑based cooling, and high‑capacity transmission support dense GPU deployments with better operating envelopes. The long‑term Cayuga ground lease adds a second strategic site with up to 400 MW of capacity, starting with 138 MW power availability in 2026 and anticipated average electricity costs below $0.05/kWh. This asset base should support a multi‑year cycle of contracted deployments while maintaining cost leadership.
Bitcoin mining remains part of the portfolio, contributing revenue and optionality but also introducing volatility tied to network difficulty, halving events, and power prices. The plan is not to abandon mining; rather, the HPC segment is designed to dominate the revenue mix over time, smoothing cyclicality with long‑dated, contracted cash flows.
5. Financial Strategy
The capital plan has scaled to match the opportunity. In October 2024, the company completed a $500 million 2.75% convertible due 2030 and launched a $200 million share repurchase program, repurchasing over $150 million by year‑end. In August 2025, TeraWulf upsized and priced a 1.00% convertible due 2031, ultimately selling $1.0 billion including the greenshoe, and entered associated capped calls with a cap price of $18.76 to mitigate dilution. Net proceeds largely targeted data center expansion and capped call costs.
The pivotal financing is the October 2025 pricing of $3.2 billion of 7.750% senior secured notes due 2030 at par for WULF Compute. The package is institutionally structured: first‑priority liens on substantially all assets of WULF Compute and guarantors (La Lupa Data LLC, Akela Data Holdings LLC, Akela Data LLC), a pledge of certain equity interests, a designated lockbox account of Fluidstack USA I Inc. to control project‑level cash flows, and, prior to completion, a pledge by Google LLC of warrants to purchase TeraWulf common stock. TeraWulf will also provide customary completion guarantees to fund WULF Compute as necessary for timely completion. Morgan Stanley is acting as sole bookrunner, with closing expected October 23, 2025, subject to conditions.
Pro forma debt service will rise meaningfully if the secured notes close as expected. On simple estimates, annual cash interest on the $3.2 billion notes at 7.750% would approximate $248 million, with the 1.00% and 2.75% convertibles adding roughly $10 million and $13.75 million, respectively, before considering any capitalized interest or project‑level structures. The counterweight is contracted HPC revenue and high site‑level margins as deployments ramp through 2026. The company also ended 2024 with $274.1 million of cash and bitcoin, and reported $219.6 million of cash and bitcoin holdings as of Q1 2025, supporting near‑term build phases.
Shareholder alignment is addressed via capped call structures to reduce dilution within predefined price ranges and ongoing repurchases ($33 million through May 2025 in addition to the late‑2024 buybacks). Nonetheless, equity holders should expect leverage and construction timing to be the principal determinants of valuation until full run‑rate cash flows are visible.
6. Technology & Innovation
The Lake Mariner campus is engineered for modern AI workloads. Dual 345 kV transmission lines provide high‑reliability, high‑capacity power delivery. Closed‑loop water cooling expands thermal headroom for dense GPU clusters, and ultra‑low‑latency fiber connectivity links the site to key network hubs. Electrical infrastructure upgrades completed in late 2024 established reliable and redundant power for initial colocation buildings (CB‑1, CB‑2) and future hosting loads, enabling Tier 3‑grade HPC operations.
Design specificity to AI is visible in customer configurations. The Core42 deployments are customized for GPU clusters and were phased across 2025 as dedicated HPC data halls came online. The Fluidstack expansions—CB‑3, CB‑4, and now CB‑5—are purpose‑built, reflecting standardized economics and a repeatable design that can be rapidly scaled. The Cayuga site adds innovation on the energy side: plans include a 67 MW solar installation and an 800 MWh battery energy storage system adjacent to the leased area, reinforcing the sustainability and grid‑flexibility attributes prized by AI tenants.
On the mining front, ongoing efficiency improvements (e.g., refresh programs to S19 XP and S21 Pro miners, achieving weighted averages around 19 J/TH in late 2024) underscore operational rigor but are increasingly a secondary narrative compared to the AI/HPC trajectory.
7. Manufacturing & Operations
Execution is oriented around a clear, staged ramp. In 2025, TeraWulf began recognizing HPC hosting revenue as Core42’s 72.5 MW deployment came online. Interconnection approvals permit drawing 500 MW from the grid today, with a pathway to 750 MW, framing the physical ceiling for near‑term growth at Lake Mariner. For Fluidstack, the deployment schedule indicated approximately 40 MW online in the first half of 2026 and full rollout by year‑end 2026 for the initial phases; CB‑5 adds an incremental 160 MW of critical IT load with operations expected to commence in the second half of 2026. These timelines, alongside the Cayuga site’s expected 138 MW power availability in 2026, define a multi‑site, multi‑tenant expansion arc through 2026 and beyond.
Operationally, TeraWulf has invested ahead of demand, energizing Miner Building 5 to reach 245 MW of crypto mining capacity and converting portions of the campus to HPC data halls. Electrical upgrades and dedicated colocation buildings (e.g., CB‑1, CB‑2, and later CB‑5) reflect a modular build model that reduces integration risk. While power price volatility affected bitcoin mining unit economics in early 2025, management guided to normalization of Lake Mariner pricing for the remainder of 2025 and continues to structure long‑term HPC contracts to align economics and power risk. Schedule adherence, cost control, and tenant coordination remain the key variables for the 2026 capacity targets.
8. Regulatory & Market Access
Capital market access has been strong, with multiple Rule 144A private placements completed or priced since late 2024, including the $500 million 2.75% convertible due 2030, the $1.0 billion 1.00% convertible due 2031, and the $3.2 billion 7.750% senior secured notes due 2030 expected to close October 23, 2025. Security enhancements—first‑priority liens, subsidiary guarantees, a designated lockbox tied to Fluidstack USA I Inc. receipts, and Google’s pledge of TeraWulf warrants prior to completion—indicate bank and counterparty confidence in collateral and project outcomes.
On the real‑asset side, the company has secured long‑dated site control and approvals that underpin expansion. An 80‑year ground lease at Cayuga covering approximately 183 acres was approved by an independent Board committee and allows development of up to 400 MW, with existing electrical infrastructure and industrial‑scale water intake supporting HPC cooling. Interconnection approvals at Lake Mariner authorize up to 500 MW with a plan to reach 750 MW, addressing a common bottleneck in large‑scale AI deployments. Details on specific environmental permits or local regulatory requirements beyond these approvals were not provided in the source materials.
9. Historical Context
Through 2024, TeraWulf doubled revenue to $140.1 million and increased adjusted EBITDA to $60.4 million while expanding self‑mining hashrate to 9.7 EH/s. The company sold its 25% stake in the Nautilus joint venture to Talen Energy for $85 million, executed a 2.75% $500 million convertible in October 2024, and authorized a $200 million share repurchase program, retiring over $150 million of stock by year‑end. December 2024 marked the strategic pivot into HPC with over 70 MW leased to Core42 for phased delivery across 2025, complemented by a long‑term ground lease at Cayuga to extend the platform.
Early 2025 reflected transitional financials as bitcoin halving and power costs pressured margins even as HPC buildouts progressed; Q1 and Q2 revenues were $34.4 million and $47.6 million, respectively, with management reiterating the timeline for HPC revenue recognition beginning in 2025. Governance and structure were simplified in May 2025 via the acquisition of Beowulf Electricity & Data LLC, eliminating a related‑party framework. By mid‑August 2025, the company had priced and upsized a 1.00% convertible due 2031 to $1.0 billion including the greenshoe, while simultaneously unveiling a step‑change in HPC scale through Fluidstack agreements—initially over 200 MW and later expanded with CB‑5 for another 160 MW—supported by a Google backstop that rose from $1.8 billion to approximately $3.2 billion and pro forma equity interest of about 14% via additional warrants.
The culmination arrived in October 2025 with the pricing of $3.2 billion of 7.750% senior secured notes due 2030, secured by substantially all WULF Compute and guarantor assets, specified equity pledges, a lockbox on Fluidstack USA I Inc., and a pledge by Google of TeraWulf warrants prior to completion. These transactions, layered atop earlier converts and buybacks, set the stage for a 2025–2026 build cadence that, if delivered on schedule, shifts TeraWulf’s center of gravity from cyclical bitcoin mining to contracted, high‑margin AI/HPC colocation at scale.