TeraWulf Inc. (WULF) Income Statement

The negative NII, which has ranged from -$409K to -$62.4M over the past ten quarters, indicates that interest expenses consistently exceed interest income. This is atypical for a financial institution and may point to a business model that relies heavily on non-interest income or has significant debt servicing costs. The recent narrowing of NII losses from -$62.4M in 2025Q4 to -$27.4M in 2026Q2 could suggest some improvement, but the absolute level remains a drag on overall profitability.

The NIM has hovered between -0.1% and -2.7% over the ten quarters, with no quarter showing positive spread. This suggests that the bank's interest-bearing assets are not generating sufficient yield to cover its cost of funds. The slight improvement from -1.0% in 2025Q4 to -0.3% in 2026Q2 may reflect a shift in asset mix or lower funding costs, but the negative margin remains a fundamental issue that limits earnings potential.

The efficiency ratio, which measures non-interest expenses as a percentage of total revenue, has been highly erratic. In quarters like 2026Q2, the ratio of 2.5% implies that expenses are a tiny fraction of revenue, but this is driven by a large negative provision expense that inflates total revenue. Conversely, in 2024Q4, the ratio of 190.9% indicates that expenses exceeded revenue, leading to operating losses. This inconsistency suggests that the bank's cost structure is not stable, and investors should monitor whether the low efficiency ratios are sustainable or an artifact of accounting adjustments.

The provision expense has been negative in the last three quarters (2026Q2, 2026Q1, 2025Q4), which means the bank is releasing reserves rather than building them. This has a positive impact on pre-provision net revenue and net income, but it may not be sustainable if credit conditions deteriorate. The positive provisions in earlier quarters (e.g., $18.1M in 2025Q2) suggest that the bank has been through a cycle of building and releasing reserves. Investors should assess whether these reversals are due to actual improvements in loan performance or management discretion.

The fee income percentage has been at or near 100% in several quarters (2025Q4, 2025Q2, 2024Q4, 2024Q3, 2024Q2), indicating that non-interest income is the primary revenue source. However, the absolute amounts have varied significantly, from $4.6M in 2026Q1 to $47.6M in 2025Q2. This volatility suggests that the bank's fee income is not recurring or stable, possibly tied to transaction volumes or market conditions. The sharp drop in 2026Q1 to $4.6M, followed by a recovery to $15.8M in 2026Q2, highlights the unpredictability of this revenue stream.

The net loss of -$939.9M in 2026Q2 is more than double the previous quarter's loss of -$427.6M and dwarfs all other quarters. This dramatic deterioration suggests a one-time event, such as an impairment charge or a change in accounting treatment. The operating income of -$80.0M is not sufficient to explain the magnitude of the net loss, implying that non-operating items, possibly related to investments or discontinued operations, drove the loss. Investors should scrutinize the footnotes to understand the drivers of this inflection and whether it signals a fundamental shift in the bank's earnings power.