TeraWulf Targets Nearly $700 Million Annualized Lease Revenue by First Quarter of 2027
Key Facts
TeraWulf expects about half of its contracted critical IT capacity to be operational and generating revenue by the end of the first quarter of 2027, and to finish that quarter with an annualized lease revenue run rate of nearly $700 million. Management said on the company's earnings call that reaching the target depends on bringing contracted capacity online, while leasing is a growing focus of its business model. The annualized revenue run rate reflects the pace at quarter-end, not revenue earned during the quarter. Third-quarter results show a growing shift toward this activity, with the company recording $62.986 million in high-performance computing leasing revenue. Some capacity, however, remains under construction and has not yet begun generating revenue.
The company's total revenue was $76.230 million in the third quarter of 2026, compared with $50.578 million in the same period of 2025. High-performance computing leasing revenue was $62.986 million, up from $7.203 million in the third quarter of 2025. In the second quarter of 2026, total revenue was $44.8 million, including $31.9 million from leasing, or about 71% of the total. Management breaks down third-quarter leasing revenue into $46.0 million from rent, $11.3 million from tenant fit-out, and $5.4 million from energy cost pass-throughs. Digital asset revenue was $13.244 million, compared with $43.375 million in the year-earlier period.
At its Lake Mariner facility, TeraWulf was operating 102 megawatts of revenue-generating critical IT capacity as of September 30, 2026, while an additional 336 megawatts was under construction in CB-4 and CB-5. The company is targeting phased delivery and the start of leasing at CB-4 during the fourth quarter of 2026, with the remaining halls coming online in stages through year-end. Management said CB-5 phased deliveries will begin in January and are targeted to continue through the end of the first quarter of 2027. The company estimated Lake Mariner costs at between $8 million and $10 million per megawatt of critical IT capacity, and said construction is proceeding within that guidance. Converting capacity under construction into operating capacity is a key milestone in reaching the stated revenue target.
At the Justified project in Kentucky, the company signed a 20-year lease with Anthropic for about 401 megawatts of critical IT capacity, with approximately $19 billion in contracted revenue over the initial term. Service-ready milestones are expected to begin in late 2027 and continue through the second quarter of 2028. On November 4, TeraWulf signed three credit support agreements covering the project's CB-1, CB-2 and CB-3 halls. The support covers certain Anthropic obligations and becomes effective when the last hall under the relevant lease begins its term. The agreements include mechanisms and options in the event of payment default or insolvency, including taking over the lease or paying a termination fee under specified conditions.
The company ended the quarter with about $2.4 billion in cash, cash equivalents and restricted cash. After quarter-end, it increased commitments under its revolving credit facility from $250 million to $400 million and added an uncommitted option to increase it by up to $150 million. It also sold its 50.1% stake in the Abernathy joint venture during the quarter for $250 million in cash. The company expects to receive an additional $150 million on or before December 31, 2026, and about $130 million on or before April 30, 2027, subject to certain adjustments. These amounts provide context for the construction and expansion plans underpinning the company's effort to increase leased capacity.
TeraWulf aims to contract annually for an additional 250 to 500 megawatts of critical IT capacity. At the Muskie project, it increased contracted power capacity from 500 megawatts to 1,000 megawatts, subject to approval by the Kentucky Public Service Commission. The second phase, totaling 500 megawatts, is expected to be delivered in 2029. In the nearer term, CB-4 deliveries during the fourth quarter of 2026 and CB-5 deliveries from January through the end of the first quarter of 2027 remain execution milestones ahead of the target to bring about half of contracted capacity online. Justified deliveries are expected to begin in late 2027 and extend through the second quarter of 2028.