--- title: "TeraWulf’s US$710m profit came from warrants it owes Google" summary: "TeraWulf’s results and 10-Q for July to September: how a 40% fall in its share price became a US$728m gain, and what its US$19bn Anthropic lease is." url: https://www.thetechbag.com/blog/terawulf-profit-from-google-warrants format: Note desk: "Markets & the AI economy" region: Global published: 2026-11-07 facts_checked: 2026-11-07 author: TechBag (The TechBag Journal) tags: ["TeraWulf","Google","Anthropic","Fluidstack","warrants","warrant liability","fair value","Black-Scholes","diluted EPS","earnings","AI data centres","data centre leases","credit backstop","share price"] cover: https://www.thetechbag.com/blog/covers/terawulf-profit-from-google-warrants.png --- # TeraWulf’s US$710m profit came from warrants it owes Google *TeraWulf’s results and 10-Q for July to September: how a 40% fall in its share price became a US$728m gain, and what its US$19bn Anthropic lease is.* Note · Markets & the AI economy · By TechBag · Published 2026-11-07 · Facts checked 2026-11-07 · Canonical: https://www.thetechbag.com/blog/terawulf-profit-from-google-warrants TeraWulf, which builds data centres in New York and Kentucky and leases them out for AI computing, reported net income of US$709.9m for July–September on revenue of US$76.2m. It lost US$88.2m from operations and carried US$53.6m of interest expense.[1] The profit came from one line: a US$728.4m gain as the value of share warrants it issued to Google fell with its own share price. On a diluted basis, which counts Google’s warrants as shares and takes that gain back out, TeraWulf’s own figures show a loss of US$18.5m, or three cents a share.[2] −US$88.2m operating loss, July–September 10-Q +US$728.4m gain on the Google warrants 10-Q +US$95.0m gain on selling its Abernathy stake 10-Q −US$18.5m net loss on the diluted basis 10-Q, EPS note ## What TeraWulf owes Google One of TeraWulf’s AI tenants at its Lake Mariner campus in New York is Fluidstack. Google agreed to backstop Fluidstack’s leases: if Fluidstack misses rent or becomes insolvent, Google either pays a termination fee or pays the rent due and takes over the lease. In return TeraWulf issued Google warrants to buy 73,580,000 of its shares at US$0.01 each, expiring in August 2030; 8,443,606 became exercisable in the quarter, when one of those leases began.[2] At a cent apiece, each warrant is worth almost exactly one share. TechBag countAbout 15% of the company 73.58 million shares is about 15% of the 501.4 million TeraWulf shares outstanding on 30 September.[2] ## Why a falling share price shows up as profit TeraWulf carries the warrants as a liability, valued each quarter with a Black-Scholes model, and books the change in that value through its income statement.[2] When the shares fall, what it owes Google is worth less, and the drop counts as a gain. Its shares closed at US$24.70 on 30 June and US$14.80 on 30 September, 40% lower.[7] The liability fell from US$1.82bn to US$1.09bn; the 10-Q puts the US$728.4m gain down to “the fluctuation in the Company’s stock price”.[2][3] It works the other way too: in January–June, when the shares rose, the same line cost US$972.0m, and over nine months it is a US$243.6m loss.[2][3][4] No cash moves either way: the cash-flow statement adds the change back, and operations used US$178.9m of cash in the nine months.[1] The chief financial officer, Patrick Fleury, called it “the non cash fair value adjustment associated with the Google warrants” on the call.[6] **Figure: What TeraWulf owes Google in warrants rose to US$1.82bn and fell back with its share price** *Fair value of the Google warrant liability, US$ million, at each quarter end from 31 December 2025, and at the 6 November 2026 close* | | Warrant liability | | --- | --- | | 31 Dec 25 | 845 | | 31 Mar 26 | 1,061 | | 30 Jun 26 | 1,817 | | 30 Sep 26 | 1,088 | | 6 Nov 26 | 836 | Source: TeraWulf 10-K and 10-Qs (balance sheets); Nasdaq closing prices · as of 6 November 2026 · 6 Nov is TechBag arithmetic (73.58m warrants × the US$11.37 close less one cent), not a reported value TechBag countThe liability tracks the share price almost one for one Divide the liability by 73.58 million and you get each quarter’s closing price less about a cent: US$11.48 against a close of US$11.49 on 31 December, US$14.42 against US$14.43 on 31 March, US$24.69 against US$24.70 on 30 June, US$14.79 against US$14.80 on 30 September.[2][3][4][7] At the 6 November close of US$11.37 the same sum is about US$836m, some US$252m below the 30 September value. The fourth quarter’s figure will depend on the price on 31 December. ## The US$19bn Anthropic lease In its release TeraWulf says it “executed a 20-year lease with Anthropic for approximately 401 MW of critical IT capacity, representing approximately $19 billion of contracted revenue over the initial term”, at its Justified Data Campus in Hawesville, Kentucky.[1] The leases were signed in July and had not begun on 30 September; capacity is due in phases from late 2027 to the second quarter of 2028, and Anthropic may extend for two five-year terms.[2][5] On 4 November Google agreed to backstop Anthropic’s obligations, from the day the last data hall begins until Anthropic holds investment-grade ratings for at least three months; if Google pays a termination fee, it may take an equity stake in the TeraWulf subsidiary that owns the campus.[5] “TeraWulf is not granting Google any incremental upfront equity here,” Fleury said on the call, and the cost of Google’s support falls on the tenant.[6] TechBag countAgainst today's revenue US$19bn over 20 years averages about US$950m a year; the third quarter’s revenue, times four, is about US$305m.[1] TeraWulf gives no yearly schedule, so the average is ours. TeraWulf’s shares closed 12.8% higher at US$11.37 on 6 November, the day of the results.[7] What to watch: the warrant line in the fourth quarter, set by the 31 December price; rent beginning at Lake Mariner’s CB-4 building this quarter; and the project debt for Justified.[1] How we did this Figures as of 7 November 2026, 4pm IST Results, the warrant terms and the lease terms are from TeraWulf’s release and 10-Q of 6 November; the liability at 31 March and 30 June and the quarterly warrant changes from its earlier 10-Qs; the Google credit support from its 8-K of 4 November. The diluted loss is TeraWulf’s own (its earnings-per-share note removes the warrant gain). Quotes from the call are labelled. The share of shares outstanding, the per-warrant values, the 6 November liability, the first-half loss, the lease average and the run rate are our arithmetic. Closes are Nasdaq’s; US markets were shut when this was written. Spotted an error? Write to us; corrections are published at the foot of the piece. Sources 1. [TeraWulf, TeraWulf Reports Third Quarter 2026 Results (8-K, Exhibit 99.1)](https://www.sec.gov/Archives/edgar/data/1083301/000162828026071306/a_wulfearningsreleaseq32026.htm) — 6 November 2026 2. [TeraWulf, quarterly report on Form 10-Q, quarter to 30 September 2026 (Notes 3, 4, 8 and 18)](https://www.sec.gov/Archives/edgar/data/1083301/000162828026071671/wulf-20260930.htm) — 6 November 2026 3. [TeraWulf, quarterly report on Form 10-Q, quarter to 30 June 2026](https://www.sec.gov/Archives/edgar/data/1083301/000108330126000166/wulf-20260630.htm) — 5 August 2026 4. [TeraWulf, quarterly report on Form 10-Q, quarter to 31 March 2026](https://www.sec.gov/Archives/edgar/data/1083301/000108330126000092/wulf-20260331.htm) — 8 May 2026 5. [TeraWulf, Form 8-K, Item 1.01: Justified Data Campus Credit Support Agreements with Google](https://www.sec.gov/Archives/edgar/data/1083301/000162828026069810/wulf-20261104.htm) — 4 November 2026 6. [The Motley Fool, TeraWulf (WULF) Q3 2026 earnings call transcript (Paul Prager, Patrick Fleury)](https://www.fool.com/earnings/call-transcripts/2026/11/06/terawulf-wulf-q3-2026-earnings-call-transcript/) — 6 November 2026 7. [Nasdaq, WULF historical prices (closes, 31 December 2025 to 6 November 2026)](https://www.nasdaq.com/market-activity/stocks/wulf/historical) — 6 November 2026 **Disclosure.** TechBag is a software reseller: it earns a margin when a reader buys through it, including from vendors named here. The analysis is TechBag’s own; no vendor paid for or saw this piece before publication. Facts are labelled reported, TechBag count or our view. **Read this next:** [ESDS’s GPU lease averages US$250m a year, 4.5 times its revenue](https://www.thetechbag.com/blog/esds-gpu-lease-4-5-times-revenue) — Another AI lease set against a small revenue line: ESDS’s GPU lease averages US$250m a year, 4.5 times its revenue. Go deeper on TechBag - [Big Tech raised a net US$272bn in nine months](https://www.thetechbag.com/blog/big-tech-borrows-sells-shares-for-ai) — how the largest AI spenders pay for the build-out that TeraWulf leases space to - [Oracle sold US$20bn of shares and notes](https://www.thetechbag.com/blog/oracle-sells-20bn-shares-notes-at-its-own-cap) — another company financing AI data centres, with the terms it priced - [GPU rent turned up](https://www.thetechbag.com/blog/gpu-rental-prices-turn-up-b200-h100) — the price of the computing that runs inside leased AI data centres