Digital infrastructure company TeraWulf (NASDAQ: $WULF), formerly focused on Bitcoin (CRYPTO: $BTC) mining, reported Friday that high-performance computing (HPC) lease revenue reached $63.0 million in the third quarter, accounting for about 83% of total revenue, while Bitcoin mining revenue fell 69%.

The results show how far the company has moved from mining toward AI data centers. Digital asset revenue declined to $13.2 million from $43.4 million a year earlier, while HPC lease revenue climbed from $7.2 million, an increase of 774%. TeraWulf reported net income of $709.9 million, largely reflecting a non-cash gain from changes in the fair value of warrant and derivative liabilities, even as its underlying operations posted a loss.

According to the earnings release, total revenue increased 51% to $76.2 million from $50.6 million a year earlier. HPC leasing accounted for 83% of revenue, up from 14% in the prior-year quarter. Net income attributable to TeraWulf included a $728.4 million non-cash gain from changes in the fair value of warrant and derivative liabilities. The operating loss widened to $88.2 million from $24.7 million, while adjusted EBITDA swung to a loss of $12.8 million from positive $18.1 million. Basic earnings per share were $1.42, compared with a diluted loss per share of $0.03. Selling, general and administrative expenses rose to $56.8 million from $16.6 million, while interest expense increased to $53.6 million from $9.8 million.

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At its Lake Mariner campus in New York, 102 megawatts of critical IT capacity were generating revenue as of Sept. 30, with another 336 megawatts under construction across two data center buildings. The first building remains on track for phased delivery and rent commencement in the fourth quarter, while delivery of the second is targeted for early 2027. TeraWulf said construction is progressing within its cost guidance of $8 million to $10 million per critical IT megawatt.

At its Justified campus in Kentucky, TeraWulf has a 20-year lease with Anthropic covering approximately 401 megawatts, representing roughly $19 billion in contracted revenue over the initial term. On Nov. 4, the company announced a Google (NASDAQ: $GOOGL) credit backstop for project financing supporting the lease, along with a definitive construction agreement with Fluor Enterprises covering three data center buildings. Phased ready-for-service completions are expected to begin in late 2027 and continue through the second quarter of 2028.

Meanwhile, at its Muskie campus, also in Kentucky, contracted power capacity doubled to 1 gigawatt from 500 megawatts, subject to approval by the Kentucky Public Service Commission. The expansion advances the expected delivery of the project's second phase to 2029. Chairman and CEO Paul Prager said Muskie provides the company with "a contracted path to a gigawatt of power."

TeraWulf ended the quarter with approximately $2.4 billion in cash, cash equivalents and restricted cash. After quarter-end, it increased its revolving credit commitments to $400 million from $250 million and added an uncommitted accordion feature of up to $150 million.

The company also completed the sale of its 50.1% stake in the Abernathy joint venture, receiving $250 million in cash during the quarter and recognizing a $95 million gain. An additional $150 million is due by Dec. 31, with approximately $130 million expected by April 30, 2027.

Chief Financial Officer Patrick Fleury said TeraWulf is well positioned to fund its contracted development pipeline, noting that the Justified project is supported by investment-grade credit. The company reaffirmed its target of contracting an additional 250 to 500 megawatts of critical IT capacity annually.

Analysts are positive on the stock. According to Cryptoprowl's stock ratings, the consensus on TeraWulf is a Buy across 3 analysts with an average price target of $22, about 118% above Thursday's close of $10.08.

Shares of TeraWulf (NASDAQ: $WULF) are currently trading at $10.45, down from a 52 week high of $29.84.