TeraWulf’s HPC Leasing Tops Bitcoin Mining in Q1

TeraWulf reported $21 million in high-performance computing (HPC) leasing revenue for the first quarter, exceeding bitcoin mining revenue of just under $13 million and bringing total Q1 revenue to $34 million, roughly flat from $34.4 million a year earlier. The quarter is the first in which HPC leasing materially outpaced digital asset income for the company.

The company is shifting more of its business toward long-term AI and hyperscaler compute contracts. On the earnings call, CEO Paul Prager described the quarter as “the first period where HPC leasing is meaningfully reflected in our financials,” attributing the increase to ramping contracted compute deals and new data center capacity coming online.

At the Lake Mariner site in New York, TeraWulf reported that 60 megawatts of HPC capacity are now generating revenue, and additional buildings are scheduled to begin operations later this year. The company is converting portions of its bitcoin mining infrastructure to support HPC workloads, a change that contributed to higher costs during the period.

Operating costs rose to nearly $200 million for the quarter. Those costs included $25.7 million in impairments tied in part to shutting down mining operations. TeraWulf recorded a net loss of $427.6 million for the quarter, widening from a $61.4 million loss a year earlier; the company said nearly half of the loss reflected non-cash warrant revaluations.

Chief Financial Officer Patrick Fleury described the quarter as “a business in transition” and noted revenue is increasingly coming from “stable, contracted” compute agreements rather than fluctuating digital asset activity. TeraWulf finished the quarter with about $3.1 billion in cash and restricted cash and reiterated plans to add between 250 and 500 megawatts of new contracted capacity annually.

The shift at TeraWulf follows a trend among former pure-play bitcoin miners expanding into data center and AI compute services. Riot Platforms, for example, recorded $33.2 million in first-time data center revenue in Q1 driven largely by a deal with a major chip supplier.

TeraWulf said it expects additional HPC capacity and contracted deals to lift revenue over the remainder of the year as more buildings at Lake Mariner and other sites come online, while not providing specific timelines for all new facilities.