Inside IREN’s Earnings ($200M AI Cloud). Plus TeraWulf & Bitcoin Mining

are back. Iron is soaring up 15, almost 20% this morning. Is that because Elon killed the cyber truck? The answer is actually buried deep in the earnings reports of both Iron and Wolf, which we have queued up for today. Also, Kan Farhani of Luxor Research on the stream, gonna talk about Bitcoin. It's way more important and more impactful than you might think.I'm joined by my co-host, Will Foxley. Will, are you gonna check your Fidelity account this morning? Yes or no?No,

no, no, no, no, we're not looking at any accounts until summer 2027.

That's right, we're gonna hold fast, we're gonna hold tight.But there is a little bit of hope, in particular from the new governor of Texas who maybe we have ragged on a little bit too hard yesterday.

Governor-elect Charlie, we still, we got two more months of the red wave of 2024 keeping us, keeping our bags

up. Yeah, yeah,

well, she has a, we have a clip from, uh, Gina, you know, Josa today.Uh, I gotta play this clip cause, uh, this is not as, as bad for, uh, the, the Texas Data Center buildout as can

we widescreen this one?

Yes, we can.

Let's see.Nice.I just want everyone to see this in 4K immaculate

in apro-business state in Texas, but what changes now with me as governor is it has to be a partnership that benefits Texans. And right now what has happened is data centers have moved into mostly rural communities, and there are no rules and laws to protect Texans, and Texans are being taken advantage of. So the difference is we will have laws to protect Texans.And we need to stop what we're doing with data centers until we have those protections, we can have a strong economy, strong industry, and protections for the people of Texas. Those things are not mutually exclusive, and I'll make sure as governor I lead to ensure that that happens.

So you're not ruling out that data centers will be able to be built in Texas. It's just you want there to be regulations to protect communities, is that right?

And that communities have a seat in the at the table to decide if and how these data centers come into their communities. Texas is like a country. We are so diverse in all the ways different communities have different needs, and those communities have to be able to walk away from the table.Able to leverage what they need for their community. So absolutely we need to make sure they are partners in this effort and that has always been my position. It is not that I hate data centers. I hate the way they are taking advantage of Texas and that stops when I'm governor.

I only heard I hate data centers.I blurred out everything else.

Yeah, well, if you have selective hearing, it could be like my parents who just won't buy my data center stocks, probably looking pretty smart right now. Yeah. So, uh, Gina might not actually be, uh, might not actually be, uh, that bad. So it's, it's, it's, it's kind of the story we've been telling, which is permitted power just became a lot more valuable. We are gonna, oh.

Can I ask one more thing, or we're gonna add one more thing, which was yesterday in this room with core scientific CEO Adam Sullivan disclosing that there are rules on the books in Texas that if a previous administration granted you rules, you can't go back retrospectively and change those later. I think it's really important going into a new administration there in Texas.

Yep.Uh, so you'll love to see it. We are gonna, before we go to our first story, let's, let's do a little hash rate index update.October was a weird month to be a Bitcoin miner. Hash rate came roaring back, and the network is back above 1 Z. Difficulty went up twice in 2 weeks.The October 16th difficulty adjustment raised it from uh an additional 5.92% to 140.58 trillion, and then on October 29th, it rose another 5.5%. Meanwhile, Bitcoin went down. As of Monday'sUh, as of last week's roundup, US USD hash price was down 8.7% on the week to $32.86 per peta hash per day. Bitcoin down 12.2% year to date.So basically, that means there are more machines out there and they're chasing fewer dollars.Will, I've got here on my screen a classic BT chart. What do you think about this chart? What is this, uh, are you, are you mining Bitcoin at these prices?

Uh, I'm not mining Bitcoin at any prices at the moment. Uh, my last rig was spun down earlier in 2026, I believe, uh, which is a little sad that the, the Bitcoin mining days behind me, but I'm more into, uh, mining the shareholders with, with public equities at the moment.Uh, I think from this perspective, it's a little disappointing for miners given that we did see hash price getting back towards that $40 per petahah per day kind of metric that had uh a nice little sizable revenue bump. But with Bitcoin going back down, and then more network hash rate being added, we're getting back into a similar spot we've been prior.Which is not great. Now, I would throw at you, Charlie, that there are maybe some positive things in the wings, which is there seems to be less development in the ASIC cycle, previous than previous cycles. So you might have more longevity with machines, uh, even with growing network cash rate because there's just less investments in the ASIC department compared to prior years. What's your thought?

Yeah, I think that the days of North American Bitcoin mining being a pretty telegraphical game of Bitcoin price outpacing hash rate and just being a pure energy play might be long gone. I think now you have to add financing, you have to add geographic arbitrage, you have to add financialization of the hash rate, forwards, and hedging.Because there's no way I'm playing this hash price chart correctly. Look at that, up and down, up and down. The people who have won this cycle, we're gonna have Khan Farhani on very, in, in just a moment to uh talk about this. Um, the people who have won this hash rate, uh, this hash rate uh volatility are those who have both hedged and used all of the knobs at their disposal, so,I'm watching this, including turning off into one of those, that's a switch, that's a big old, it's like those big old uh uh cartoon switches, yeah, that you have to pull from the wall, uh, so when, when we talk about demand response, it, you know, it's, uh, yeah, it's computers, but somewhere, at some level of the of the electronics sack, there's a little cartoon guy flipping those rigs off and on.So, we are gonna keep on going. We're gonna kick it off with some Iron news. Iron having a ripper of a day saying, hey, if you sold yesterday, you might have been off outside. Don't be too hasty now. But before that, a word from our sponsor, Saluna.

Saluna Holdings, NASDAQ listed ticker SLNH develops data centers co-located with wind and solar plants, turning surplus renewable energy into computing power for AI and other intensive applications. We are proud to partner with Saluna Holdings here at Blockspace, and if you would like to learn more, please visit Salunacomputing.com. That's Salunacomputing.com.

Iron investors can take a collective breath after hearing revenue figures and an updated CapEx forecast from Thursday's earnings call. Yesterday afternoon, Iron hosteds Q1 2027 earnings, which showed growing quarterly revenue to over $200 million decreased CapE guidance to $20 billion for 2027, and an update on the seemingly ugly disagreements with Microsoft many investors were anxious about just yesterday. Let's break down the numbers and then dig into some analysis and some takes online.First, IRN's revenue came in at $200 million for the quarter, up 66% from the previous quarter. Its revenue backlog grew 22% to $20.3 billion. ARR will be $1 billion for 2026 and move towards $4 billion in early Q2 2027 due to delays we will discuss in a moment.It expanded its deal list with a 5-year deal at $22 million per megawatt and a short-term deal at $40 million per megawatt. Iron also expanded its deal with the Frontier AI lab, assumed to be anthropic over the quarter with undisclosed figures.Now to the CAPE, which is frankly still concerning but better than last earnings. Management says that they will decrease CPE spending next quarter due to tightening financial markets around $20 billion in total, down from 20 to 30%, down 20% to 30% from previous quarter's guidance of $25 to $30 billion.Now to the tough nuts. Microsoft's, now to the tough nuts. Microsoft. Dan Roberts clarified on the earnings call that there indeed was a delay with Ryzen One, just as the information in Bloomberg reported. However, no penalties were caused and was performed by Iron voluntarily. So Charlie, we got a few storylines to dig into here. I'll leave you with the price target from B. Riley saying Iron is a buy with the price target at $64.Do you buy it after all the bloodletting in the market recently, or do you kind of hold the course as of now?

IfI had any extra dollars lying around, yeah, I'd probably buy some iron, because it seems to me that the entire sector is way too discounted. Iron, uh, was able to say, I, I don't think that, uh, iron's really, like, significantly at fault for the Microsoft deal. This is a Microsoft decision separate from, I think, what Iron.Uh, the, the delay there. So, yeah, if, if I were being a little more active in my trading, uh, I'd probably, I'd probably pick up some Myron chairs here. It, it, it just seems way too low to me right now, to, like, make sense.

Totally, totally. I mean, I'm showing the iron share price on screen at the moment, trading about $20.82 as of Friday 1:00 p.m. so we'll probably close the week around $20.Still pretty tough if you got in the last few years. I mean, some of these guys are down 50, 50% or more. Uh, so I will disclose that. However, going over back over to the, the earnings call itself, the $200 million ARR should give a little bit of a breather for people that they're, they are moving towards that $4 billion ARR number. Now, why didn't they hit that previously? Like they're expected to hit that this, this last year, basically like Q4 2026 and kind of like finish out the year there.And again, for people who are wondering why it's like Q1 2027 right now, they have like old financial standards from Australia when they uh first kind of started as a company, now they've re-domicilled, so that's for the discrepancy there. But they, they moved that 4 billion ARR number forward because of what happened with Microsoft and these Horizon sites. For people who listen to the show yesterday, uh, you'll remember that the information in Bloomberg reporting about Microsoft havingUh, some issues at the Horizon sites. We got more information on the earnings call yesterday, basically saying that, yes, there are indeed issues with Horizon One, but they arise not from IA necessarily as IA management disclosed it. Be interesting to hear what Microsoft said, we'll probably never know. But Iron is saying, hey, Microsoft is asking for updates because there's newer, uh, models of chips that they want implanted into the facility.And so they had to redo a bunch of things or rebuild wiring cabling, etc. They're not expecting that to be a notable increase in the capex cost on the horizon build. Uh, that was another thing from the, the earnings call I'd like to point out.Uh, but overall, that was something that pushed back the 4 billion ARR number. It's going to hit sometime in January 2027, Dan Roberts said, or maybe in February of 2027 as well. And I'll just flip through here, Charlie, a little bit. I think there's like, there's some interesting stuff looking at what kind of market is iron in with its neo cloud stack versus some of the other companies. We're gonna talk about Terra Wolf a little bit later and there's a niceDifference between these two companies with the hosting model versus the neo cloud model. OK, Charlie, another question for you as, as we're going through this.What did you make of like the Capex question here,

the amount of spend that they're kind of, they're decreasing their spend, or

what do you make of the delays

in that

conversation

there? Are you, would you be more worried about that or less worried about

that?

Uh, I think that would make them the first company which reduced their Capex spend guidance, uh, in a regime where everybody has been increasing it. Um, I don't have a strong opinion on that. I do, I do think it's notable that they did reduce their capex spend, uh, in the near future. So, uh, I, I, I need to hear other smarter people give some takes. I'll also, I'll, I'll bring up this point.What are they up to? It's like 32 gigawatts of power pipeline, and they, yeah, they have how many hundreds of gig of megawatts currently? It's between 1 and 200, I think.Um, does that make them like the most, like, lopsided, like, active megawatts versus, like, multiple gigawatts in the pipe? At what point do they have more gigawatts in the pipeline than they have megawatts online?

This is at what point do you have more in pipeline than you have employees of the company? Uh, I, yeah, I, uh, I'll, I'll set the gigawatt pipeline thing aside because I've always discounted that, like going back to days.You have a lot of companies talk about pipeline. I don't care about pipeline until it's contracted, and I really don't care about.Any of that towards producing revenue in a sense. I think the market's moving that way as well, given that not everyone can show up and actually build these things.We have on screen here, something else I want to throw up, which is just like the international expansion.This is gonna matter more as we see, not necessarily balkanization in the US, it's probably like a pre-Trump admin to term that we could throw out there, but certainly we are getting back into a, uh, polarized two camps world. Texas has flipped blue, right across the border, Oklahoma where you're at, it's red.Are we gonna see more buildouts in Texas the next year? Probably not as much, but Iran has Australia builds, they have Spain build, they obviously have Canada as well, and they announced that they're going to build out more canal flats.I think this shows a lot of forethought on like where do you want to go. You're also seeing this in international markets where some people are already like courting SpaceX and courting some other companies. So, if you're an iron investor, and you look at like this map, you're, I think you feel a little bit better about where your dollars are are going long term cause you're not as concentrated versus some of the companies out there. Any thoughts on your side from that?

Yeah, um, I look at this map and I've, I've said this before, the sun will not set on the Iron Empire. You'll have 24/7 operations everywhere you go. So I do love a good international map. They need a data center in Hawaii, on one of the islands.

They should do, uh, they should do like a powered by a volcano cause that was like Iran's first thing, remember? They were like the green energy bitcoin miner back in the day when it was virus.They were like zero carbon, but they should do, uh, they should do like a collab with the, I don't know, of Hawaii powered by a volcano.

They could pull the Bitcoin plate and do the volcano power down in El Salvador.But uh uh those days, those days are a bit behind us. Everybody's pivoting to AI and making way more money because of it. We, however, have not fully abandoned Bitcoin. We're gonna talk about it with our next guest, Khan Farahani, after a word from our sponsor, Lygos.Hedge funds are getting liquidated. Is your Bitcoin safe? It's not just Bitcoin price drying up. Big whales, hedge funds and lending desks are going under after a series of hacks and AI powered exfiltrations. Counterparty risk is rampant, so it's more important than effort to understand who actually controls your Bitcoin. Don't be the next FTX or Celsius victim.If you're working with another loan provider, do yourself a favor before it's too late and check out LIGO's finance, Blockspace's preferred non-custodial Bitcoin lender, which uses Bitcoin native smart contracts to protect your stack.With LIGOS, you always know where your Bitcoin is, hold your keys, no wrapping, no bridging, and no hypothecation. Get competitive rates as low as 10% APR. To learn more, go to LIGOs.Finance.October was the month Texas switched Bitcoin mining back on. Ercot summer peak pricing season ended September 30th, and the miners who'd been powering down to dodge those peaks came roaring back.But Bitcoin price is also down, and the AI trade is looking weak. So what should miners and data center builders do? Here to elucidate the Bitcoin mining story is K Farahani, research at Luxor, and my co-host, Will Foxley. Welcome back to the show, K.

Thanks so much, Charlie and Will. Always good to be back.

Yeah, love having you on. OK, so, Texas, let's kick it off with the Lone Star State. How much of October's hash rate growthwas simply the end of 4CP,the Texas Summer program that pays miners to shut off peak hours.Was it cheaper power, or is this just the end of that season?

Yeah, that's a good question. Um, what I'll say is TLDR, the hash rate is from Texas, we can tell, likely, um, and we'll get into a few numbers behind why we think that is. But before we do, let's talk a little bit about a story, right? We call this concept the summer slowdown, and Charlie, as you alluded to, there's an incentive mechanism for coincidental peaks for CPE.Program in Texas's Ecot grid, which motivates miners to proactively curtail throughout the four summer months spanning from June to September. So, during this window, the mining decision is not only about whether hash price is good enough and your power price is cheap enough, but there's this second.Second decision stacked on top of your hash or not question, which is, should I be online or offline during certain periods in order to avoid transmission and distribution charges for my electricity throughout the next year. So, the game mode changes, all of a sudden, miners are making two decisions simultaneously at once.What does this mean? Well, we expect more curtailment throughout this period, so lower hash rates, muted difficulty adjustments, so difficulty adjustments closer to zero instead of being much wider, and then at the same time, we see more hash price volatility. So, that's expected. We know it comes and goes because it's a scheduled um seasonal event that takes place, and miners simply respond to their economic incentives.So, what did we see recently? Well, in October, we saw that hash rate exploded back up, right? Good news, we're back into the zeta hash era.Well, the thing is, right before 4CP began in June, we were right back to where we are essentially now, in terms of network hash rate. The seven-day hash rate left May and began June at around 1,015, and as of today, early November, we're back to around 1050. So, we saw around a 10% increase in hash rate throughout the month of October.Um, and October also averaged 11% above the June to September window, which lines up with historical months over the past 3 years as well. So, safe to say that a lot of hash rate has suddenly.Returned, coincidentally, when the 4CP season ends and miners don't have this motivation to curtail anymore, which is why we believe that a substantial amount of the hash rate return was driven by 4CP season coming to a close.

I'm going to pull up your report here in just a moment, Con. I'm going to switch to a different view and do 10 seconds of editing.All right, so, uh,I like to say that summer is driven by a little more predictable variability in, uh, like, in, in just the weather and the, the, the circadian rhythm of the Bitcoin mining, but we're heading into winter, which is more event-driven. You talk about this in the report, you, you, you kind of call the shots out and say, look, we gotta look ahead to, like, storm events. What should miners be looking to uh as we head into winter here?

Yeah, it's a really good question. You're right. Now, the game mode is changing once again. Throughout the summer period, we had this scheduled seasonal event that was expected to happen. We know it's gonna happen. It's by design. Miners simply respond to the incentives.That are given to them, and we also know what happens as we come out of that season as well, right? During the summer we saw the slowdown, and in October we saw this beach ball effect, where a lot of the curtailed hash rate suddenly turned back on, and hash rate exploded back up. Now, moving forward, as we move into fall and winter,The weather aspect changes. All of a sudden, considerations around weather turn from a seasonal incentive program towards unpredictable event-driven.Um, actions, right? In winter, we see winter storms, unpredictable weather events taking place, which may or may not impact power prices, and also impact grid stress, which forces grids to call on curtailment services from emergency response service providers.That they have. So, really, the consideration for minors is we're now moving from a known scheduled seasonal event into thinking about unpredictable, unforeseen weather-driven price impact events, which may or may not create uh episodes for miners to curtail.

So, uh, we'll talk a bit about the hedging, because hedging has kind of defined which miners have survived this, uh, past year. Um, who won, hedgers or unhedged? Give me the breakdown.

Excellent question. And we love reporting this every month because we have a ton of data to, to speak on this. We look at it in a few different ways. First, we look at the specific month that was involved. In this case, it would have been the October 2026 contract. But then we also look back on.On the past 12 months and mining since the latest halving, which would have been back in April of 2024, to examine what rolling hedges look like as well. Instead of a one-off hedge, what would it look like to be consistently hedging as part of a disciplined hedging program. There's two answers for the question of October 2026. 1st, I'll talk about the Bitcoin denominated hash price side, because it's easier, it's cleaner, there's less factors to be thinking about.The 3 factors that go into Bitcoin hash price, let's remind ourselves, is the block subsidy, current network difficulty, and transaction fees. Now, if you look at this table, Charlie, what you can see, uh, just scroll down to the Bitcoin denominated one, right below here, yes, perfect. So, what this tells us is that miners that hedged Bitcoin hash price.Essentially throughout the 4CT period, right? June is just under by 1%, but July, August, and September are in the money, they're green. What it means is that those who sold Bitcoin denominated hash rate forward throughout the months of July, August, and September, ended up making more money than just mining on the spot. So, one observation is that Bitcoin denominated hash price hedgers won throughout the 4CP season.And the underlying logic behind this is very simple to see. Why is this the case? Because as 4 CP season begins, we know that there will be more curtailments, less hash rate, which means Bitcoin denominated hash price goes up throughout this period.So, from June to September, there was a slight recovery in Bitcoin denominated hash price, spot BTC hash price.An opportunistic miner would have realized that come October, the motivation to curtail is gonna go away. All of a sudden hash rate is gonna explode back up, and then Bitcoin denominated hash price is gonna take a hit back down. So it would have made sense to sell forward and lock in those Bitcoin hash price levels throughout the 4 CP season, because they would have been higher.Before October, when more hash rate comes back, and that's exactly what this table shows here. Essentially, throughout the 4 CP season, it made sense to sell forward Bitcoin denominated hash price contracts and lock in that higher hash price during this window of opportunity.Now, if you scroll back up to the other table, that shows the US dollar denominated side of things, but here we see a different picture, right? And the reason is because when you're thinking about hedging dollar denominated hash price, there's a 4th factor that gets included into the mix, and obviously that's Bitcoin's price, right? The US dollar exchange rate for Bitcoin, which is highly volatile, and as we know, as of recent, it's been all over the place.So, throughout the summer, had you locked in a dollar denominated hash price, at the time, Bitcoin was trading much lower, right? We saw a recent recovery from around the 60s to the 80s level between August and September, now we're back down to around 75. But back earlier in May and June, Bitcoin price was even lower, right? We were in the $160,000 to $70,000 dollar range.So, uh, hash price hedgers, dollar denominated hash price hedgers would have locked in a lower hash price level and missed out on the recent recovery that we've seen throughout that period. So this explains the differences between dollar denominated versus Bitcoin denominated hash price hedging for the month of October 2026, specifically. Now, one final thing I'll say is if you scroll down a bit further, we'll find two more charts.That showcase rolling hedge performance, exactly. So, this is rolling hedge performance over the past year. The message is very simple. Over the past year, it's generally made sense to hedge against dollar denominated hash price. So even though a one month forward sale, uh, or most of the forward sales for dollar denominated hash price lost in October, specifically,Over the past year, doing this consistently has made sense across the board. You can see the range of additional protection that hash price hedging provided miners was between 3 to around 12% from dollar denominated hedging. And then opposite story for Bitcoin denominated hedging, it generally didn't pay off, because over the past year, hash rate and difficulty have been down, so there's no need to hedge for spot miners.And then finally, if we go down one more table, we're gonna see an even more zoomed out version of this chart. So this is looking at the same thing, rolling um hash price hedge performance, but going all the way back to the 2024 halving, back to April of 2024. And the message here is that any type of hedging, regardless of your contract denomination or your hedge horizon,You know, whether it was half a year, whether it was 1 month, it's generally made sense to hedgeagainst half price.

I want to talk about the forward curve, which has also been pretty interesting. Can you kind of discuss what that means for Bitcoin miners who are in the market, how they kind of look at uh the future of hash price here over the next few months, and then what we're seeing when we look at this chart.

Yes, absolutely. So, this gift that we're looking at shows us how the forward curve moves throughout the month of October. So, this is trading activity for future contracts spanning for the next six months out, right, all the way up until March of 2027.That evolved throughout the month of October. And basically what this does is it summarizes the opinion that's being expressed by the hash rate forward market, taking into account all the trading activity that takes place from the many participants around the world. What was that message throughout the month of October? Well, it's that, first of all, the 4CP recovery was priced in.The forward curve showcased through its forward.Contract values, that there was gonna be a resurgence in hash rate, which would have meant that the curve moved down as hash prices expected to go down when more hash rate comes in throughout October. So, that's the first thing. 4CP is priced into the curve, you can actually see the curve express this view ahead of time, because they're predicting the, the participants are forecasting that this is gonna happen. So, the question is, how close are they with their forecasts.And then the second is, the curve flattened throughout the month of October, which means that expectations around both Bitcoin price action and difficulty plus transaction fees have now slowed down and muted, so they're flat.So, basically, what the market is telling us is that we expected a very recent resurgence in hash rate, which has now taken place, but over the next six months or so, throughout November to March 2027, the forward market expects flat, uh, Bitcoin price action and flat difficulty growth as well.

My favorite question to wrap this type of interview up is, um,Y'all identify that there is 323 eggs a hash idol, a new all-time high for idol hash rate. I mean, this is more hash rate than the entire network was, like, two years ago, just sitting idle. What happens? How does this change, like, the market dynamics going forward? If, if, if the market recovers, Bitcoin recovers, how does this play in, like,This is kind of a crazy scenario we found ourselves in. What do you think?

Yeah. So, I'll explain the number that we're talking about here. Um, this number is coming from our latest quarterly projections report, which we write for our hash rate index premium customers, uh, every 3 months. At the turn of the financial quarter, we provide this report, which gives us an 18-month forward-looking projection window into mining metrics around hash price and hash rate. Now, Charlie, this 300 or so exa hash that we call idle, what does this represent?This represents the difference between the global supply curve for hash rates since inception of the Bitcoin network.And the active global hash rate supply that we see today, right? Right now, as of today, the hash rate is around 1,050X, and then our complete supply curve would be around 1.4 zeta, and the difference is this 300X. What does it represent? Well, it's essentially sidelined or retired A6. This is the supply that is uneconomic.So it's, it's waiting for a better hash price. When a better hash price comes along, such that a portion of this hash rate machines that are offline, retired, older generation, legacy machines, most of them, they will eventually become economic and they may or may not turn on.Another distinction, which is important here is that this doesn't represent powered hash rate, right? It's not like these machines are sitting on racks on powered facility sites, waiting for the exact moment that they become economic and they turn back on. These are machines that are sitting in basements. I have a JPro sitting right here, which would be part of this idle capacity. It exists, but it's not necessarily powered, and it's not economic.Now, how does this affect market dynamics? Well, essentially, this idle portion of hash rate that's sitting on the sideline, call it retired if you will, it's waiting for a hash price explosion or a recovery, such that it may cap and provide a ceiling for hash price. So, let's think about a scenario where hash price explodes. Let's say it goes up to $50.60 dollars, $70.80 dollars for a pat of hash.At some point, this portion of the 300 exa hash is going to start becoming economic, and if they're able to be powered, they're going to start turning back on, which is going to increase hash rate, cause a difficulty adjustment, or retarget that is positive, and that is going to eat away, chip away at the hash price increase that we see.So effectively, what we're saying is that a lot of this retired sideline hash rate may eventually react to a higher hash price, and tame it down as it goes up.

Con, I'm looking at the, uh, my former almanac and El Nino is gonna be particularly bad this year, and that means a lot of storms in the US probably. So I think we can have a, a number of really fun uh lookbacks ahead of us over the next few months. So, I'm looking forward to doing some more lookbacks with you, Kon Farhani, Research at Luxor, thank you for joining us.

Thanks so much. See you in the next one.

Cheers.We are gonna keep on rolling. We're gonna talk about the next earnings call from Tera Wolf after a word from our sponsor, Luxor.This episode is brought to you by Luxor's Commander, Bitcoin miner management software built for enterprise operations. Commander gives you real-time fleet monitoring, bulk remote commands across your fleet, and intelligent Minor, which is an automated profitability engine that runs every 5 minutes, adjusting power settings to live hash rate and energy markets. ERCOT backtests show over 10% more profit profitability versus binary mining.Commander Pro is $100 per megawatt or a 25 basis point pool fee adder, which is roughly half the price of competitors.It comes with a 60 day free trial. Get started at Luxor.tech/commander.

Terrewolf Investors got a strong earnings update Friday morning with AI revenue nearly doubling. Construction at Lake Mariner moving forward, and a new agreement with Google that could significantly reduce the financial risks surrounding its $19 billion anthropic deal. The company reported Q3 revenue of $76.2 million up 70% from the previous quarter, as it continues transforming its Bitcoin mining business into an AI data center company.But the biggest story might be Google's new financial backstop, which could improve the economics and evaluation of Terrewolf's next major data center campus. Let's break down the numbers first. Terrewolf generated $63 million in HBC lease revenue, up 97% quarter over quarter. AI infrastructure now accounts for 83%. Again, 83% of the company's total revenue. At Lake Mariner in New York, Terrewolf has 102 megawatts of operating IT capacity.With another 336 megawatts coming online over the next two quarters. Management expects to exit Q1 2027 with approximately $700 million in annualized leasing revenue as those buildings become operational. And importantly, construction costs remain within guidance at roughly $8 to $10 million per megawatt. It's a big development given that a lot of investors have been worried about CapE costs and overruns recently.Lastly, to the Google deal, which I think is the most interesting part of the earnings call. Terwolf recently signed a 20-year agreement worth approximately $19 billion with Anthropic at its justified campus in Kentucky.Represents about 401 megawatts of IT capacity.Google has now agreed to financially backstop Anthropic's lease obligations. This is why it matters. If Anthropic defaults, Google can be required to assume the lease or make a termination payment designed to reduce outstanding project debt. That gives that gives Terrawolf a much stronger credit profile when approaching lenders to finance the campus, potentially lowering borrowing costs and reducing the risk of getting stuck with a massive data center and an unpaid lease. It also decreases the cost and.Opportunities also decreases the opportunities for management to dilute shareholders. Charlie, we've got a few storylines here again to pick through. 700 million annualized leasing revenue, Google Credit. What do you think about what happened with Terror Wolf phones earning call? Are you as bullish on Terre Wolf given the Google News as I am? Yeah, yeah,

I'm more bullish. I've been seeing this on the timeline. This is a Google, Google, Google story.I think we all knew, like, it was pretty telegraphed that Google was gonna, like, backstop and that they were gonna be the official announced signed counterparty to Terror Wolf here cause of fluid stack. Um.But I think it can't be understated that in a meta where financing is the competitive edge, with Google on the other end, you're incredibly well positioned. So, it's uh $700 million in annualized revenue now at Lake Mariner, that's huge. I think it's even bigger though, that it's Google's revenue, so.

We got a great comment in the chat from Jason saying, Wolf had a great call today. Paul Prager is a great CEO, talked about everything people want to hear about, no dilution, shareholders first. I've just heard what they have now and he goes online. The stock is a minimum of $17. In my notes, I do see that there are some nice bold calls as well. Looks like we're seeing a price target for $20 from KBW.Uh, if my notes are correct. I haven't seen a lot of other notes out yet, but I expect to get a few on Monday, Tuesday. Uh, some of the banks take a few more days, might even take a few months to update, but we'll see, it depends on how fast some of these bankers are post earnings. Overall, Charlie, I think this is like a really positive earnings call for Terra Wolf, just like it was a really positive earnings call for uh for Iron earlier.And I, I would put the differences, I, I kind of like that we have the earnings call for Ivanne and Wolf on the same

becausethey are sort of the um two different ways you can build a business, right? You have the NeoCloud stack, and vertize everything, GPUs, you're gonna own the contracts, the AI labs.Uh, you're gonna be able to take financing against the GPUs against the data centers in the public market. And then you have the terrible wolf side which is like, hey, we want to be a landowner, energy provider, we wanna basically build these things and lease out the site. We don't want to play the GPU game.Interestingly, you kind of see a similar margin on the same businesses, uh, year over year for the megawatts, but you do see a big drastic change in terms of like the revenue you can get, uh, where iron's at like 43 to $44 million per megawatt, and then Trow is looking, um, much smaller and, and like about a few million dollars per megawatt. Uh, but the, the costs are a lot different there as well. So I think that's a really important thing to note as well as like these costs are different.And so with the cost structure coming down, you're expecting to see a little bit of a drop there. Um, yeah, any, any other thoughts from this I can keep ripping if you, if you want me to.

Yeah, uh, I'm not the finance guy. I never will be, honestly, y'all let me talk too much about finance as it is, but I will say I would like to know the terms of the Google deal.I don't think those were published, and the terms do matter. It's like, I was just very praising of Google on the other side, but then I'll follow that up with, um, I want to know a few more details. So, what is the actual financing look like? Cause that's obvious there's always another question.There's always more clarification that can affect, you know, how this stock is positioned. Now it's down to the terms. You've got Google, great, check. You're probably leading the pack, they're probably mispriced relative to their competitors.So, I wanna see those financing terms.

Yeah, and I'll actually go back and just make it crystal clear for everyone listening to the show, the cost I was mentioning, um, per megawatt, I was not as clear as I should be per megawatt bill capex for critical IT it's like 8.9 million for the Lake Manor build, and then for the horizon bill, which I'm mimicking off of, it's like 43, 44 million per megawatt.Um, so I was talking about the capex there, and then in terms of like the earnings per megawatt, it can kind of change. So on the iron call side, right, we, we talked about like, you can do $20 million per megawatt, and then it goes all the way to $40 million per megawatt, just depends on the load build. Um, for a company like Terrawolf, which just kind of focused on selling the power of land, you're getting into like the low million dollars per megawatt, um, but it stacks up over time, right? And like your risk profile is, is reduced considerably.So we're just kind of flipping through here on the video if you're listening to audio and just kind of looking at their earnings deck and there's some, some great color here. I think a big takeaway for me, Charlie, is like getting that investment grade backstop. They talked a lot, a lot about that on the, on the earnings call. Patrick Fleury was on, uh, discussing like they need a public company investment grade backstop. That's why they didn't do it directly with anthropic. Anthropic is not public yet, great company, great tenant, they're not able to do that quite yet, but they needed to be able toHave that. Now, the last thing I want to bring up on the call is like, where is Terre Wolf going in the next few years and like what does construction uh look like for them?In the future. I think the biggest thing here is perhaps like an international build. Uh, if we go back, we don't see anything on their map here.Clicking around and it's on slide 6. You know, they have New York, they have, looks like Maryland, yeah, it's Maryland and then they have Kentucky.There's rumors that they're looking internationally, uh, so we could expect something in Europe in the near future, that would be pretty bullish for the stock, again, getting to that, that international perspective.For the company and kind of de-risking a little bit by going internationally, I think that could be a boost for them. Um, they also said that they're gonna continue to try to sign 250 to 500 megawatts per year, um, and that just continues to add like a real estate company, adding more and more and more rental units to your portfolio with the future being like they're gonna be a REIT with a really high percentage, uh, of, of possible dividend air quotes for investors.Um, any thoughts on like the similarities with Iran or similarities to any other companies we're looking at on this model?

Uh, I, no, I don't, unfortunately, I don't have a whole lot of insight.Uh, to give on the similarities, I will note that, um, I think if you work for Terror Wolf, you probably wanna live in Pittsburgh, Pittsburgh, Pennsylvania, cause that puts you smack dab in the middle of all the sites, so you can get there in uh a few hours each. So that's, that's my insight looking at that map.

Yeah, yeah, no, I don't have too much more like a, a very positive for them, and, uh, I think like they're getting their stock price appreciated for that reason, so we can close out on that terrible wolf segment, um, as we kind of close out the week. What a week it was truly,

oh myGod, what, what an absolute week. Uh, I recommend everybody turn your phone off, go outside, go touch some grass this weekend.The markets will be back on Monday, whether you want it to or not. But go, take a big deep breath, don't post anything political on Facebook or uh this weekend, just go hang out with your family, cause the stocks will be there when you come back. It's gonna be a volatile winter, you know it, you can, you just know that it's gonna be a doozy.Thank you for listening to Block Space Live. We are Compute's daily live show, co-hosted by Charlie and Will.If you want to learn more about Blockspace, or better yet, get more Blockspace content, Blockspace.media is the website that is Blockspace.media.This show becomes a podcast shortly thereafter. Follow us on our socials for your favorite clips and highlights, and if you're watching on YouTube and you haven't already, subscribe and hit that notification bell. For those of you who made it to the end, there's a link in our X bio to join our Blockspace insiders chat. It's free.We just kicked out some inactive people, so hop in, contribute, tell us what your trades are, don't spam the group, and we'll find you in DMs on X. Thank you so much for watching Blockspace. We'll see you Monday.