TeraWulf Inc. (Nasdaq: WULF) (“TeraWulf” or the “Company”), owners
and operators of vertically integrated, domestic bitcoin mining
facilities powered by more than 95% zero-carbon energy, today
announced preliminary unaudited financial highlights for the fiscal
year 2023 alongside projected financial metrics for 2024.
TeraWulf plans to release financial results for the fourth
quarter and full year 2023 on or about Tuesday, March 19, 2024. The
unaudited results in this press release are preliminary and subject
to the completion of accounting and annual audit procedures and are
therefore subject to adjustment.
Preliminary FY 2023 Financial Highlights
(Unaudited)
The Company expects the following preliminary and unaudited
financial results for fiscal 2023:
- Revenue is expected
to be approximately $69.0 million, compared to $15.0 million in
fiscal 2022.
- Gross profit is
expected to be approximately $41.0 million, compared to $4.0
million in fiscal 2022.
- Non-GAAP Adjusted
EBITDA is expected to be approximately $30.0 million, compared to
$(34.2) million in fiscal 2022.
- Cash and cash
equivalents as of fiscal year-end 2023 is expected to be
approximately $54.0 million, compared to $1.3 million at fiscal
year-end 2022.
- Net debt at fiscal
year-end is expected to be approximately $85.0 million,
compared to $144.7 million at fiscal year-end 2022.
Additional Non-GAAP metrics for fiscal year 2023, which include
the financial impact of TeraWulf’s joint venture interest in the
Nautilus Cryptomine facility1, include the following:
- Self-mined 3,407
bitcoin in 2023, comprised of 2,168 bitcoin at the Lake Mariner
facility and 1,239 bitcoin at the Nautilus Cryptomine
facility.
- Power cost averaged
$8,676 per bitcoin self-mined, or approximately $0.032/kWh in
2023.
Key Non-GAAP Metrics |
FY 2023 |
Bitcoin Self-Mined – Lake Mariner 2 |
|
2,168 |
Bitcoin Self-Mined – Nautilus |
|
1,239 |
Value per Bitcoin Self-Mined 3 |
$ |
29,645 |
Power Cost per Bitcoin Self-Mined 4 |
$ |
8,676 |
Avg. Operating Hash Rate (EH/s) 5 |
|
4.1 |
Management Commentary
"In 2023, we achieved significant milestones by initiating and
delivering rapid organic growth at our existing sites, prioritizing
debt repayment, and fortifying liquidity. We look forward to
sharing comprehensive details of our fourth quarter and full-year
2023 results, as well as our outlook for 2024, later this month,"
said Paul Prager, Chief Executive Officer of TeraWulf.
“The critical significance of infrastructure scalability at our
current sites cannot be overstated. It's the backbone of our
strategy, providing stability, control, and substantial long-term
cost advantages. This strategic asset empowers us to optimize
efficiency, scale operations opportunistically, and ultimately
drive profitability. As we continue to invest in and expand our
infrastructure, I firmly believe we're cementing our position as a
leader in the industry,” added Prager.
Patrick Fleury, Chief Financial Officer, emphasized, "Our
proactive debt reduction, dedication to financial transparency, and
rapid, organic infrastructure growth coupled with our leading unit
economics underscores the Company’s commitment to lead in this
space – now and beyond the halving.”
2024 Financial Guidance
TeraWulf's 2024 outlook reflects the Company's commitment to
achieving industry-leading unit economics, proactively reducing
debt, and strategically investing in organic growth to further
expand digital infrastructure capacity at its existing sites.
Any guidance that we provide is subject to change as a variety
of factors can affect actual operating results. Certain factors
that may impact our actual operating results are identified below
in the safe harbor language included within Forward-Looking
Statements of this press release.
Profitability
The Company estimates that its total production cost, or
cost-to-mine a bitcoin, ranks among the lowest among publicly
listed bitcoin mining companies at approximately $25,000 per BTC
pre-halving and assuming the illustrative market inputs outlined in
the table below. Post the upcoming halving, which is projected to
occur in April 2024, TeraWulf’s estimated production cost per BTC
is expected to be approximately $37,000.
The following financial guidance reflects the Company’s
expectations for the fiscal year 2024 and is provided on a non-GAAP
basis.
|
2024 Pre-Halving |
2024 Post-Halving 6 |
Total 2024 |
Illustrative Market Inputs: |
|
|
|
Network Hash Rate (EH/s) |
|
575 |
|
|
520 |
|
|
Transaction Fees (%) |
|
5.0 |
% |
|
10.0 |
% |
|
|
|
|
|
Illustrative Operating Inputs: |
|
|
|
Miner Fleet Efficiency (J/TH) 7 |
|
25.4 |
|
|
24.3 |
|
|
Total Hash Rate (EH/s) |
|
8.0 |
|
|
10.0 |
|
|
Total Bitcoin Mined 8 |
|
1,348 |
|
|
2,292 |
|
|
3,640 |
|
|
|
|
|
$ in 000’s |
$/BTC |
$ in 000’s |
$/BTC |
$ in 000’s |
Power Cost (@ $0.035/kWh) 9 |
$ |
17,800 |
$ |
13,205 |
|
$ |
49,600 |
$ |
21,640 |
|
$ |
67,000 |
SG&A for the Period |
|
8,300 |
|
6,157 |
|
|
19,200 |
|
8,377 |
|
|
27,500 |
Other OpEx for the Period |
|
4,100 |
|
3,042 |
|
|
9,400 |
|
4,101 |
|
|
13,500 |
Interest Expense for the Period10 |
|
3,700 |
|
2,745 |
|
|
6,500 |
|
2,836 |
|
|
10,200 |
Total Cost |
$ |
33,900 |
$ |
25,149 |
|
$ |
84,300 |
$ |
36,780 |
|
$ |
118,200 |
Organic Growth
As previously announced, operational capacity at the Lake
Mariner facility has now reached 160 MW, accompanied by a hash rate
of 8.0 EH/s entering March. Construction of Building 4 at the Lake
Mariner facility is proceeding as planned, substantially funded,
and is on track for completion by mid-2024. This additional
infrastructure is anticipated to add an incremental 35 MW of
capacity, thereby increasing TeraWulf’s operational mining capacity
to approximately 10 EH/s.
With significant room for expansion at its existing sites, the
Company reiterates its commitment to achieving 300 MW of
infrastructure capacity in operation by the close of 2024, and
reaching 550 MW, or approximately 28.3 EH/s with current generation
of miners, of deployed infrastructure in 2025. The Company
continues to evaluate the highest return use for its energy
infrastructure, including the potential application of HPC/AI.
Debt Repayment and Liquidity
Following significant debt repayments totaling $21.4 million
related to 2023 quarterly excess cash flow sweep payments and an
$18.6 million voluntary prepayment in February 2024, TeraWulf's
total debt balance was approximately $106.0 million as of the end
of February. The Company anticipates an additional repayment of
approximately $30.0 million during the first week of April, thereby
reducing the debt balance to $76.0 million.
After the expected April debt repayment, and based on current
bitcoin price levels, the Company anticipates having approximately
$20.0 million in excess liquidity to navigate the upcoming halving.
This projected cash reserve can be allocated towards additional
debt reduction, potentially lowering the debt balance to $56.0
million, excluding any excess cash flow sweep payments for in Q2-Q4
2024.
Key Preliminary, Unaudited GAAP Metrics ($ in
000’s) |
February 29, 2024 |
December 31, 2023 |
Term Loan Balance |
$ |
106,000 |
$ |
139,000 |
Cash |
$ |
48,000 |
$ |
54,000 |
Bitcoin |
$ |
1,100 |
$ |
1,800 |
Net Debt 11 |
$ |
58,000 |
$ |
85,000 |
Common Shares Outstanding |
|
298,589,910 |
|
276,733,329 |
Note About Preliminary Unaudited Financial
Highlights
The preliminary financial results presented above are the
responsibility of management and have been prepared in good faith
on a consistent basis with prior periods. However, we have not
completed our financial closing procedures for the three months and
year ended December 31, 2023, and our actual results could be
materially different from these preliminary financial results. In
addition, RSM US LLP, our independent registered public accounting
firm, has not audited, reviewed, compiled, or performed any
procedures with respect to these preliminary financial results and
does not express an opinion or any other form of assurance with
respect to these preliminary financial results or their
achievability. During the course of the preparation of our
consolidated financial statements and related notes as of and for
the year ended December 31, 2023, we may identify items that
would require us to make material adjustments to the preliminary
financial results presented above. As a result, prospective
investors should exercise caution in relying on this information
and should not draw any inferences from this information regarding
financial or operating data not provided. These preliminary
financial results should not be viewed as a substitute for full
financial statements prepared in accordance with U.S. GAAP. In
addition, these preliminary financial results are not necessarily
indicative of the results to be achieved in any future period. For
a discussion of the limitations of non-GAAP financial measures and
the rationales for using non-GAAP financial measures, please
reference the “Non-GAAP Measure” section in Management’s Discussion
and Analysis of Financial Condition and Results of Operations in
our September 30, 2023 10Q filing with the SEC.
We have not provided reconciliations of preliminary and
projected Adjusted EBITDA to the most comparable GAAP measure of
net income/(loss) to common shareholders. Providing net
income/(loss) to common shareholders guidance is potentially
misleading and not practical given the difficulty of projecting
event-driven transactional and other non-core operating
items that are included in net income/(loss) to common
shareholders, including but not limited to asset impairments and
income tax valuation adjustments. Reconciliations of
this non-GAAP measure with the most comparable GAAP
measure for historical periods is indicative of the reconciliations
that will be prepared upon completion of the periods covered by
the non-GAAP guidance. Please reference
the “Non-GAAP financial information” accompanying our
quarterly earnings conference call presentations on our website at
www.terawulf.com/investors for our GAAP results and the
reconciliations of these measures, where used, to the comparable
GAAP measures.
About TeraWulf
TeraWulf owns and operates vertically integrated,
environmentally clean bitcoin mining facilities in the United
States. Led by an experienced group of energy entrepreneurs, the
Company currently has two Bitcoin mining facilities: the wholly
owned Lake Mariner facility in New York, and Nautilus Cryptomine
facility in Pennsylvania, a joint venture with Cumulus Coin, LLC.
TeraWulf generates domestically produced Bitcoin powered by 95%
zero carbon energy resources including nuclear, hydro, and solar
with a goal of utilizing 100% zero-carbon energy. With a core focus
on ESG that ties directly to its business success, TeraWulf expects
to provide industry leading mining economics at an industrial
scale.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995, as amended. Such
forward-looking statements include statements concerning
anticipated future events and expectations that are not historical
facts. All statements, other than statements of historical fact,
are statements that could be deemed forward-looking statements. In
addition, forward-looking statements are typically identified by
words such as “plan,” “believe,” “goal,” “target,” “aim,” “expect,”
“anticipate,” “intend,” “outlook,” “estimate,” “forecast,”
“project,” “continue,” “could,” “may,” “might,” “possible,”
“potential,” “predict,” “should,” “would” and other similar words
and expressions, although the absence of these words or expressions
does not mean that a statement is not forward-looking.
Forward-looking statements are based on the current expectations
and beliefs of TeraWulf’s management and are inherently subject to
a number of factors, risks, uncertainties and assumptions and their
potential effects. There can be no assurance that future
developments will be those that have been anticipated. Actual
results may vary materially from those expressed or implied by
forward-looking statements based on a number of factors, risks,
uncertainties and assumptions, including, among others: (1)
conditions in the cryptocurrency mining industry, including
fluctuation in the market pricing of bitcoin and other
cryptocurrencies, and the economics of cryptocurrency mining,
including as to variables or factors affecting the cost, efficiency
and profitability of cryptocurrency mining; (2) competition among
the various providers of cryptocurrency mining services; (3)
changes in applicable laws, regulations and/or permits affecting
TeraWulf’s operations or the industries in which it operates,
including regulation regarding power generation, cryptocurrency
usage and/or cryptocurrency mining, and/or regulation regarding
safety, health, environmental and other matters, which could
require significant expenditures; (4) the ability to implement
certain business objectives and to timely and cost-effectively
execute integrated projects; (5) failure to obtain adequate
financing on a timely basis and/or on acceptable terms with regard
to growth strategies or operations; (6) loss of public confidence
in bitcoin or other cryptocurrencies and the potential for
cryptocurrency market manipulation; (7) adverse geopolitical or
economic conditions, including a high inflationary environment; (8)
the potential of cybercrime, money-laundering, malware infections
and phishing and/or loss and interference as a result of equipment
malfunction or break-down, physical disaster, data security breach,
computer malfunction or sabotage (and the costs associated with any
of the foregoing); (9) the availability, delivery schedule and cost
of equipment necessary to maintain and grow the business and
operations of TeraWulf, including mining equipment and
infrastructure equipment meeting the technical or other
specifications required to achieve its growth strategy; (10)
employment workforce factors, including the loss of key employees;
(11) litigation relating to TeraWulf, RM 101 f/k/a IKONICS
Corporation and/or the business combination; and (12) other risks
and uncertainties detailed from time to time in the Company’s
filings with the Securities and Exchange Commission (“SEC”).
Potential investors, stockholders and other readers are cautioned
not to place undue reliance on these forward-looking statements,
which speak only as of the date on which they were made. TeraWulf
does not assume any obligation to publicly update any
forward-looking statement after it was made, whether as a result of
new information, future events or otherwise, except as required by
law or regulation. Investors are referred to the full discussion of
risks and uncertainties associated with forward-looking statements
and the discussion of risk factors contained in the Company’s
filings with the SEC, which are available at www.sec.gov.
Company Contact:Jason AssadDirector of
Corporate Communicationsassad@terawulf.com(678) 570-6791
1 The Company’s share of the earnings or losses from operations
at the Nautilus Cryptomine facility is reflected within “Equity in
net income (loss) of investee, net of tax” in the consolidated
statements of operations. Accordingly, operating results of the
Nautilus Cryptomine facility are not reflected in revenue, cost of
revenue or cost of operations lines in TeraWulf’s consolidated
statements of operations. The Company uses these metrics as
indictors of operational progress and effectiveness and believes
they are useful to investors for the same purposes and to provide
comparisons to peer companies. All figures except Bitcoin
Self-Mined are estimates and remain subject to standard month-end
adjustments. 2 Includes bitcoin earned from profit sharing
associated with a hosting agreement at the Lake Mariner facility
and TeraWulf’s net share of bitcoin mined at the Nautilus
Cryptomine facility, based on hashrate share attributed to the
Company.3 Computed as the weighted-average opening price of bitcoin
on each respective day the Bitcoin Self-Mined is earned.4 Excludes
hashrate associated with 64 bitcoin earned from profit sharing
associated with a hosting agreement.5 While nameplate inventory for
WULF’s two facilities is estimated at 5.5 EH/s as of December 31,
2023, the Company significantly expanded capacity at its Lake
Mariner facility during 2023 (from 2.0 EH/s as of December 31,
2022). Further, actual monthly hash rate performance depends on a
variety of factors, including (but not limited to) performance
tuning to increase efficiency and maximize margin, scheduled
outages (scopes to improve reliability or performance), unscheduled
outages, curtailment due to participation in various cash
generating demand response programs, derate of ASICS due to adverse
weather and ASIC maintenance and repair.6 Assumes first full day of
halving is April 21, 2024.7 Assumes 3% ancillary load. Nameplate
miner efficiency is 24.6 J/TH pre-halving and 23.3 J/TH
post-halving.8 2024 pre-halving bitcoin mined based on actual
results for January and February 2024 (per publicly filed monthly
operating reports) and estimated results for March 2024 and for the
period April 1, 2024 to April 20, 2024 based on “Illustrative
Market Inputs” and “Illustrative Operating Inputs” above.9 2024
pre-halving power cost reflects estimated power costs of $0.053/kWh
for January 2024, $0.037/kWh for February 2024, $0.030/kWh for
March 2024, and $0.030/kWh for the period April 1, 2024 to April
20, 2024.10 Interest expense in 2024 based on 11.5% interest rate
and $106 million principal balance of debt outstanding in Q1 2024
and $81 million outstanding in Q2-Q4 2024. Does not reflect
anticipated incremental debt repayments with cash generated in
Q2-Q4 2024.11 Net debt calculated as the outstanding principal
balance of the Company’s term loan less cash and cash
equivalents.
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