Terawulf Inc. · NASDAQ:WULF
Terawulf — Q3 2024 Earnings Presentation
24 slides from Terawulf's earnings presentation, Nov 12, 2024
Slide 1: Investor Update November 2024
Forward Investor Update November 2024
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT This presentation is for informational purposes only and contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities igation Reform Act of 1995, as amended. Such forward-looking statements include statements concerning antici
Slide 3: WULF: The Power of Infrastructure
WULF: The Power of Infrastructure WULF MINING > 195 MWin operation > 50 MW of expansion planned in Q1 2025 @rTerawutr @ TERAWULF ~750 MW potential capacity ~250 MW to be deployed for bitcoin mining in 2025 ~500 MW additional capacity for HPC hosting Site benefits from core electrical infrastructure
Slide 4: Track Record of Execution: Rapidly scaling since inception
3 MW 60 MW 60 MW 110 MW 195 MW 245 MW 30 MW 50 MW 50 MW 0.3 EH/s 2.0 EH/s 3.3 EH/s 5.5 EH/s 10.0 EH/s 13.1 EH/s 0.0 EH/s 2.0 EH/s 4.0 EH/s 6.0 EH/s 8.0 EH/s 10.0 EH/s 12.0 EH/s 14.0 EH/s 0 MW 50 MW 100 MW 150 MW 200 MW 250 MW 300 MW 350 MW 400 MW 1H 2022 2H 2022 1H 2023 2H 2023 3Q 2024 1Q 2025E LMD
Slide 5: Low-cost Bitcoin production with scalable HPC hosting infrastructure
Delivering low-cost Bitcoin production with scalable HPC hosting infrastructure ➢ Site has access to an additional ~500 MW of potential data center capacity ➢ Strategically positioned to host HPC workloads. ➢ Achieved an all-in power cost of $0.032/kWh in 2023 ➢ Targeting an all-in power cost of $0.
Slide 6: Nautilus JV interest sale: strategic rationale and realized value
Strong Financial Returns: MOIC exceeding 3.4x and substantial premium based on the NPV of the remaining lease term Reduced Risk Exposure: Allows for monetization of WULF’s interest before expiration of the Nautilus 2¢ power contract and ground lease (June 2027) Enhanced Miner Fleet and Opex Efficien
Slide 7: Increased hash rate with operational efficiencies
7 ➢ As part of the Nautilus sale, TeraWulf received ~30,000 Talen miners ➢ WULF successfully monetized over 80% of the Nautilus miners, along with all existing S19 miners from its fleet, generating approx. $10.5 million in proceeds ➢ In Q1 2025, WULF expects to receive an additional 14,400 S21 Pro m
Slide 8: Enhanced Mining Fleet
Enhanced Mining Fleet (1) Includes WULF’s net share of miners contributed to Nautilus JV. (2) Miner orders to be installed in Q4 2024. (3) Reflects planned sale of S19J/J-Pro and MicroBT M30 miners, and exercise of option to purchase 7.4k and 14.4k of the remaining 30k Bitmain S21 Pro miners under t
Slide 9: Positive EBITDA and cash flow generation despite difficult environment
Positive EBITDA and cash flow generation despite a difficult operating environment 9 Metric Amount Comments End of Period Hash Rate 10.0 EH/s ➢ 100% increase year-over-year in self-mining hash rate Bitcoin Self-mined 555 ➢ 6.0 BTC per day Power Cost $0.038/kWh ➢ Represents power cost per BTC of $30,
Slide 10: Quarterly trends: BTC mined, hash rate, revenue, EBITDA
All figures include TeraWulf’s net share of Nautilus JV 10 889 980 959 1,051 699 555 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 5.5 5.5 5.5 8.0 8.8 10.0 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 $19.4 $18.7 $25.0 $40.5 $32.2 $17.0 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 $7.6 $9.0
Slide 11: Convertible Notes Offering minimized shareholder dilution
11 Net shares Issued Upon Conversion (Grey Shaded Zone is Provisionally Callable by Company) $500.0mm Deal Size at 2.75% coupon up 32.50% Conversion Premium with up 100.0% Capped Call Overlay + $115mm share repurchase (in Millions) (18) (18) (18) (18) (13) (6) 0 1 3 5 (5.5%) (4.5%) (3.5%) (2.5%) (1.
Slide 12: Growth in Bitcoin mining and HPC/AI is funded
Growth in Bitcoin mining and HPC/AI is funded 12 (1) Q4 2024E Cash Flow assumes average BTC price of $70,000 and average network hash rate of 710 EH/s, October 1 – December 31, 2024. (2) Nautilus Proceeds include $85 million cash consideration and the return of $1.3 million of working capital. (3) I
Slide 13: HPC hosting contracts projected to unlock platform value
HPC hosting contracts are projected to unlock substantial platform value 13 (1) Estimated 2025E cash from operations assumes: 1) average BTC price of $80,000 and network hash rate of 725 EH/s; 2) 20 MW CB-1 and 50 MW CB-2 operating for 9 months and 6 months, respectively. (2) Estimated HPC Revenue P
Slide 14: HPC hosting contracts projected to unlock platform value
HPC hosting contracts are projected to unlock substantial platform value ➢ Sale of Nautilus JV interest increases liquidity to support HPC growth ➢ Convertible financing secures the delivery timeline for CB-1 and CB-2: ▪ CB-1 (20 MW) is on track for delivery in Q1 2025 ▪ CB-2 (50 MW) is scheduled fo
Slide 15: Unit economics expected to improve after upgrades
Unit economics are expected to improve upon completion of site electrical upgrades, MB-5 and miner fleet upgrade 15 Q3 2024 Q4 2024E Full Year 2024E Q1 2025E Illustrative Market Inputs: Network Hash Rate (EH/s) 715 725 Transaction Fees (%) 3.0% 3.0% Illustrative Operating Inputs: Miner Fleet Efficie
Slide 16: Maximizing land, megawatts, and capital for long-term value
Maximizing land, megawatts, and capital for optimal long-term value creation 16 Cloud Service Provider (CSP) Colocation – Whitespace & Rack Ready Build to Suit Description Shell data center and GPU clusters; space, power, cooling, fiber/internet, security, compute, storage and environment. Shell dat
Slide 17: HPC capacity delivery timeline
17 ➢ Q3 2024: 2.5 MW operational at WULF Den ➢ Q1 2025: 20 MW expected to be operational (CB-1) ➢ Q2 2025: 50 MW expected to be operational (CB-2) ➢ 2H 2025: Additional 178 MW expected to be available ➢ Future Expansion: Up to 250 MW; design and timeline to be finalized based on ongoing customer dis
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Slide 19: Management team
N A Z A R K H A N Co-Founder, Chief Operating Officer & Chief Technology Officer 20+ years in energy infrastructure and cryptocurrency mining; previously at Evercore P A U L P R A G E R Co-Founder, Chairman & Chief Executive Officer 30+ year energy infrastructure entrepreneur; USNA Foundation Invest
Slide 20: Estimated diluted share count
As of November 11, 2024 20 Note: all figures are approximate. Outstanding 6.00$ 7.50$ 9.00$ 10.50$ 12.00$ 13.50$ 15.00$ 16.50$ Common Stock 385,908 385,908 385,908 385,908 385,908 385,908 385,908 385,908 385,908 Convertible Senior Notes 3,057 8,648 13,222 Preferred Stock, Convertible into Common Sto
Slide 21: Continued value from low-cost power and demand response at Lake Mariner
Continued value from low-cost power and demand response at Lake Mariner 21 (1) Net delivery charges include tax, and transmission and distribution charges less anticipated demand response revenue and curtailment impacts on realized power price (2) NYISO Zone A prices atypically high during Q2-Q3 202
Slide 22: Q3 2024 Statement of Operations
Q3 2024 Statement of Operations ‘CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 80, 2024 AND 2023, (ts thoutseds, exept mbes ‘pean Ended Ni Aen Ended ‘Semi ie Revemie S 27059 S$ tnsss Ss toss Ss aso ‘Cont and expenses: Cost of resem (erclsve of deprecat
Slide 23: Q3 2024 Balance Sheet
Q3 2024 Balance Sheet @rerewutr ‘CONDENSED CONSOLIDATED BALANCE SHEETS |AS OF SEPTEMBER 30,2024 AND DECEMBER 31, 023 (Gu thousands xcept numberof hares and par value; unaudited) t f | é t j ; i i | i i f i i i i j 1 j i | | i i i i ‘Open ease bi. et of curent porton = ig : : : STREET | STOCKHOLDERS’
Slide 24: Adjusted EBITDA non-GAAP note
24 Note: The Company presents adjusted EBITDA, which is not a measurement of financial performance under generally accepted accounting principles in the United States (“GAAP”). We use Adjusted EBITDA to eliminate the effects of certain non- cash and/or non-recurring items, that do not reflect our on