Summary Q2 2025 revenue hit $47.6M (+34% YoY) with $14.5M EBITDA, signaling a shift beyond Bitcoin mining. Fluidstack–Google deal secures $3.7B over 10 years, expandable to $8.7B with added capacity. Google’s $3.2B backstop and 14% stake strengthen the credit profile and unlock cheaper capital. 1.15 GW capacity and 85% margins could push valuation toward low double-digit EV/EBITDA by 2026. TeraWulf Inc. ( WULF ) has undertaken one of the most spectacular reinventions in the digital infra sector. Once considered a seasonal Bitcoin miner, the firm has transformed into a vertically integrated operator of high-performance computing (HPC) and AI infrastructure backed with clean power. The reinvention has changed the way investors value the company, away from day-to-day crypto price fluctuations to long-term contracted revenue as well as recurring cash flow. The second quarter of 2025 results from the company highlighted this evolution. TeraWulf’s revenue came in at $47.6 million , up 34% from the prior year, with a return to positive $14.5 million adjusted EBITDA after losing the first quarter. While the lion’s share of revenue still, though decreasingly so, originated with Bitcoin mining, figures marked the last quarter prior to the company’s transition to a steadier hosting model. With 1.15 gigawatts (GW) of future capacity across New York facilities, TeraWulf has developed a platform that has evolved to an energy-linked data center utility. Mining revenue maximization is no longer what it centers around, it's maximizing revenue from megawatts and power connectivity, hard things to come by in the compute world of AI. TeraWulf Presentation The Google-Funded Fluidstack Innovation The turning point came in August 2025 when TeraWulf announced a landmark partnership with Fluidstack, a global AI cloud platform that operates GPU clusters for companies such as Character AI, Moonvalley, Poolside, and Black Forest Labs. The three-part agreement covers more than 360 megawatts (approx 250 megawatts of gross capacity + 30-day exclusivity option for an additional 160). The expanded agreements represent approximately $6.7 billion in contracted revenue over the initial 10-year terms, with two five-year extensions that could add another $9 billion in potential revenue. The structure of the deal is what makes it transformative. Google is offering a $3.2 billion backstop of Fluidstack’s lease commitments, essentially guaranteeing project finance, and has acquired about a 14% equity interest in TeraWulf. The agreement affords the company investment-grade credit sponsorship while matching it up with one of the world’s largest buyers of AI infrastructure. Deployed to full capacity by the end of 2026, the leases should generate about $670 million a year in revenue and $570 million of net operating income with an 85% NOI margin. TeraWulf Presentation CEO Paul Prager described it as a redefinition of what this business is. The agreement converts TeraWulf’s model from spasmodic Bitcoin exposure to high-duration, inflation-hedged cash flows. The first phase of Fluidstack’s 360-megawatt deployment is scheduled to begin in the first half of 2026, with the entire capacity delivered by year-end 2026. More than a customer agreement, this is a vote of confidence in TeraWulf’s technical competence as well as its strategic importance in a power-access-defined industry. TeraWulf Presentation The Hidden Moat Beneath the Megawatts TeraWulf’s strength is in the assets below the compute stack, real estate, power, and interconnection. The Lake Mariner in Barker, New York, and the recently acquired Cayuga location in Lansing form a vertically integrated platform specifically designed for the power-hungry AI world. As of the second quarter of 2025, Lake Mariner had approximately 245 megawatts energized across five buildings, with plans to expand toward 750 megawatts as additional grid capacity is approved. The location draws power from dual 345 kV transmission feeds and redundant fiber paths that provide sub-2-millisecond latency to Toronto, less than 6.5 milliseconds to New York, and under 8 milliseconds to Boston. The Cayuga campus brings 400 megawatts of scale capacity under an 80-year lease, starting with 138 megawatts live in 2027 with full buildout in 2029. Housed in a 90% zero-carbon area with industrial water intake and triple redundant transmission, it is the mirror image of the power and cooling benefits of Lake Mariner. TeraWulf Presentation This vertical control enables TeraWulf to avoid a major bottleneck facing hyperscalers with permit and interconnect delay. Competitors rush to buy power at rising costs, and TeraWulf benefits from an average power cost of roughly $0.05 per kilowatt hour for the second half of 2025. Such power certainly is a permanent moat. The company can attract capital as well as customers with no multi-year lead times to be faced with in order to win new customers. By fusing together the energy infrastructure with the deployment of compute, TeraWulf has developed into a hybrid between a power producer REIT and a data center REIT that can monetize electrons as well as uptime. This is what the re-rating will be based on. TeraWulf Presentation Why High Multiples May Be Misleading On the surface, TeraWulf’s valuation seems stretched. The company trades at 41x EV/Sales on a trailing basis and 28.8x forward, with an EV/EBITDA multiple of 118x versus a near 15x sector median. On face value, those multiples suggest extreme overvaluation, but they’re warped because of the timing of TeraWulf’s transition to high-profile cryptocurrency mining. The company’s trailing metrics still incorporate the pre-HPC Bitcoin mining revenue base, yet analyst estimates already capture the impending tsunami of revenue coming from hosting AI. WULF is trading at about 28x the forward P/S level, substantially higher compared to the 8x 3-year average. As Fluidstack and Core42 leases ramp up through 2026, consensus revenue estimates rising from ~$200 million to over $420 million should drive rapid multiple compression, potentially bringing the P/S below 13x once recurring revenue dominates. Data by YCharts Caution Ahead: Execution Will Define the Outcome TeraWulf's transformation is a wonderful promised territory, but the future road is risky. The first near-term risk is execution; installing over 360 megawatts of hyperscale capacity within the fourth quarter of 2026 will necessitate seamless coordination, consistent supply chains, and contractor execution. Any delay of a matter of months in equipment shipping, transformer installation, or GPU integration can shove revenue recognition out to 2027. Another area of concern is customer concentration. Fluidstack and Core42 essentially comprise almost all of TeraWulf’s contracted HPC revenue. Though both are reputable counterparties, Google with credit backing, and the absence of tenant diversification create dependency risk. Any decrease in the growth of Fluidstack or AI demand could translate directly into TeraWulf’s cash flows. Finally, New York's grid and regulatory constraints represent structural risks. Increasing power capacity beyond 750 megawatts will be contingent on favorable interconnection horizons as well as steady electricity prices. TeraWulf has the advantage of long-term pure power contracts, but general volatility in the power market or new state-level permit issues can diminish its cost benefit. Briefly, the stock's potential is evident, but so is its vulnerability to perfect execution. Bottom Line TeraWulf is constructing the utility stack of AI, a set of clean-energy-powered, hyperscale compute camps that power the world’s most hungry algorithms. Its high-end multiple is a reflection of anticipation rather than hype. The narrative is no longer Bitcoin or near-term price action to investors with a long-term view. However, the narrative is the industrialization of compute delivered at scale, the kind of platforms that can do it.
