WULF rise without increase in profit, the growth trap for miners?

Bitcoin miner TeraWulf's Q3 revenue increased by 37% year-on-year to $35.4M, which looks impressive, but a closer look at the financial report reveals the real story.

Income has increased, but profits have shrunk:

The cost growth rate far exceeds the revenue growth rate—cost expenditures surged by 46% ($14.9M→$21.8M), directly compressing the gross margin from 42% to 38%. The main reasons are the soaring electricity costs and mining machine depreciation.

The more heartbreaking thing is that the net profit margin fell from 21% to 15%. Although the net income is still $5.3M, this profit margin seems very fragile in the face of Bitcoin price fluctuations.

How are the competitors?

The gross margin of peer Cipher Mining reached 41%, with significantly tighter cost control. Although Riot Platforms has larger revenues of $84.8M, its gross margin is only 31%, and it incurred losses in Q3. It seems that a larger scale does not necessarily mean profitability.

Stock prices and valuations are somewhat disconnected:

WULF has risen 99.5% since the beginning of the year, but the price-to-book ratio is as high as 19.35 times (industry average 2.88 times), which is a clear premium. Analysts expect a loss per share of $1.51 in 2025, which has also widened compared to a month ago.

Core Issue: With the adjustment of mining difficulty and the rising cost of electricity, how long can this low-margin model last? If the BTC price drops or production continues to expand, cash flow pressure will be significant.