Cipher Shifts Focus, Bitcoin Mining Set to Fade by 2026

Date of Call: Feb 24, 2026

Financials Results

• Revenue: $60 million, down from Q3, driven by the difficult bitcoin mining environment and Bitcoin price line

Guidance:

• Revenue from Bitcoin mining to further decrease as decommissioning miners at Black Pearl is finished.
• Expect to continue utilizing project level, nonrecourse financing structures through construction as additional leases are executed.
• Plan to opportunistically reduce Bitcoin position over time, exiting entirely by the end of 2026.
• Projected $669 million of average annualized net operating income from October 2026 to September 2036 based on current leases.
• By 2035, project approximately $754 million in annual net operating income.

Business Commentary:

Strategic Transformation and Rebranding:

• Cipher Digital completed a transformation from a Bitcoin miner to a digital infrastructure company, as evidenced by the rebranding announced during the call.
• This shift was driven by the company's focus on delivering hyperscale compute and securing long-term leases with hyperscalers.

Financial Foundations and Bond Issuance:

• The company completed a $2 billion bond offering, which was met with strong demand, pricing it at a yield 1 full percent lower than their previous issuance.
• This successful bond offering validated their strategy and secured the remaining capital needed for the build-out of Black Pearl.

Data Center Development and Leasing Activity:

• Cipher Digital signed leases representing 600 megawatts of capacity and approximately $9.3 billion in contracted revenue, including initial terms of 10 to 15 years with extension options.
• The leasing success and capital raising are part of a strategic evolution to focus on durable, long-term contracted cash flows through partnerships with leading hyperscalers.

Pipeline and Growth Trajectory:

• The company's pipeline of 3.4 gigawatts positions it to continue executing on its new business model, with a projected average annualized net operating income of $669 million over the next decade.
• The growth trajectory is underpinned by the ongoing demand for power-dense hyperscale infrastructure, which outpaces supply.

Regulatory and Market Positioning in Texas:

• Given recent developments in ERCOT, Cipher Digital has strengthened its regulatory expertise and is confident in its ability to navigate the environment effectively.
• The company's proactive engagement with ERCOT and relevant authorities aims to secure firm load status and maintain previous energization timelines for its sites in Texas.

Sentiment Analysis:

Overall Tone: Positive

• Management highlights '2025 was a defining year' with transformation to a digital infrastructure company, 'incredible quarter of momentum,' 'strong conviction,' and being 'very bullish' on securing tenants. Stated 'the progress is just getting started' and 'can't wait to tell you what's next.'

Q&A:

• Question from Mike Grondahl (Northland): Tyler, it seems like Stingray and Reveille are pretty much baked for leases. But is there anything else to call out there just in terms of demand? And then secondly, could you talk a little bit about the other 4 in just the demand environment you're seeing for a lease, Ulises, McLennan, Mikeska and Colchis, which have some power coming on in late '27 or '28?
  Response: Stingray is far along with a preferred tenant; Reveille has strong interest, especially from neo clouds. Ulises (Ohio) has significant hyperscaler interest. Demand remains high, and the environment is favorable for negotiating economics.

• Question from Christopher Brendler (Rosenblatt Securities): Congratulations on the progress here. Can you talk about some of the new hires you've made as you sort of build out the team and shift the bench more towards HPC and data centers away from bitcoin mining?
  Response: Focused on adding depth and specific expertise, such as hiring Lee Bracher for ERCOT regulatory affairs, and adding senior-level talent from hyperscalers to support scaling construction, engineering, and operations.

• Question from John Todaro (Needham & Company): Going to the 207 megawatts at Odessa that's still currently bitcoin mining. I guess, just what would the next steps be in determining suitability for HPC? And then, I guess, just more color on the kind of the end plans for Odessa?
  Response: Odessa's conversion to HPC depends on securing a lucrative deal with a tenant; options include restriking the PPA. No rush as Bitcoin mining economics are strong until the PPA expires in July 2027.

• Question from Brett Knoblauch (Cantor Fitzgerald): Tyler, just on the ERCOT kind of noise, if you will, over the past few weeks. Is that causing maybe the big hyperscaler tenants to shift their focus from maybe Texas outside of Texas? Or are they still very much demanding Texas assets?
  Response: No decrease in hyperscaler interest in Texas; they are focused on behind-the-meter solutions, and Texas is uniquely suited for this approach.

• Question from Reginald Smith (JPM): Congrats on all the progress. Tyler, I think you categorize -- Stingray has been in advanced discussions, and I think same time. I believe you had a discussions. And this I'm somewhat surprised given it you just acquired in December, maybe talk about, one, do I have that right? And how do you and as it relates to, are you seeing discussions progress faster than what you have historically seen with new sites that you've acquired?
  Response: Stingray is furthest along with a preferred tenant; Ulises is further along than other sites but discussions are not as advanced due to its recent acquisition.

Contradiction Point 1

Odessa Site's End-Use Plans and Urgency

Contradiction on the timeline and motivation to repurpose the Odessa site from bitcoin mining to HPC, impacting strategic priorities and asset utilization.

What are your thoughts on the recent earnings report? - John Todaro (Needham & Company)

20260224-2025 Q4: The Odessa site... has excellent bitcoin economics, so no immediate plans to invest further in mining. Conversion to HPC is possible but would require a lucrative lease deal... there is no time pressure due to strong current cash flow from mining. - Rodney Page(CEO)

What are the next steps to assess the suitability of the 207 megawatts at Odessa for HPC, and what are the end plans for this site? - Joseph Vafi (Canaccord Genuity Corp.)

2025Q3: The Odessa PPA is extremely valuable... Given this economic advantage, the company has no urgency to convert the site to HPC; mining remains highly profitable. - Rodney Page(CEO)

Contradiction Point 2

ERCOT Approval Process and Competitive Dynamics

Contradiction on whether the new ERCOT rules are increasing or decreasing competitive pressure for site approvals, affecting the company's market position and development strategy.

What are your comments on the earnings report, Reginald Smith (JPM)? - Reginald Smith (JPM)

20260224-2025 Q4: The new ERCOT process is a positive development for serious developers like Cipher... Increased hurdles... will make it harder for speculative 'wildcatter' developers... This dynamic benefits established developers with proven track records... - Rodney Page(CEO)

How do the ERCOT proposals impact land flipping dynamics in Texas by smaller companies to larger ones? - Gregory Lewis (BTIG, LLC, Research Division)

2025Q3: The market for power is highly competitive, and the company is confident in its pipeline. - Rodney Page(CEO)

Contradiction Point 3

Timeline and Confidence in Finalizing Hyperscaler Deals

Inconsistent confidence levels and deal finalization timelines with key tenants, affecting the predictability of the company's revenue streams and growth plans.

What are your key takeaways from the Q2 earnings report? - John Todaro (Needham & Company)

20260224-2025 Q4: The company prioritizes quality counterparties... Discussions are ongoing... Diversification is now more feasible given the foundational HPC business is established. - Rodney Page(CEO)

Are there still opportunities for diversification into neo clouds with better lease economics, and how are you approaching different customers? - Bill Papanastasiou (Keefe, Bruyette, & Woods, Inc.)

2025Q2: Interest from hyperscalers has waxed and waned, but interest notably increased in July... The market has stepped up... The company is reasonably far along with one tenant but will continue to pursue opportunities. - Rodney Tyler Page(CEO)

Contradiction Point 4

Conversion Strategy and Timeline for the Odessa Site

Contradictory statements on the urgency and plans to convert the Odessa site from Bitcoin mining to HPC, creating uncertainty about asset management and future capacity.

What are your key priorities for the next quarter? - John Todaro (Needham & Company)

20260224-2025 Q4: The Odessa site... has excellent bitcoin economics, so no immediate plans to invest further in mining. Conversion to HPC is possible... but there is no time pressure due to strong current cash flow from mining. - Rodney Page(CEO)

What are the next steps in assessing HPC suitability for the 207 megawatts at Odessa currently used for bitcoin mining, and what are the ultimate plans for Odessa? - Bill Papanastasiou (Keefe, Bruyette, & Woods, Inc.)

2025Q2: The goal is to complete construction by late 2026 and be ready to pivot quickly as demand grows. - Rodney Tyler Page(CEO)

Contradiction Point 5

Tenant Interest and Engagement with the Fortress JV Site

Characterization of tenant interest and engagement pace for the key Barber Lake (Fortress JV) project changed notably, impacting expectations for project progression and revenue timing.

What are the key financial highlights and strategic initiatives for the quarter? - Christopher Brendler (Rosenblatt Securities)

20260224-2025 Q4: The hiring strategy focuses on adding depth and excellence to key functions... The company is building a team capable of managing multiple large-scale data center projects simultaneously (e.g., building four data centers at once). Hiring continues to focus on senior talent from hyperscalers... - Rodney Page(CEO)

Have you made any new hires as you shift focus from bitcoin mining to HPC and data centers? - Brett Knoblauch (Cantor Fitzgerald)

2025Q1: The pace of tenant and investor discussions has not abated; in fact, it has increased. There have been more reverse inquiries from large global investors and tenants. Conversations with major hyperscalers continue at a similar pace—sometimes fast, sometimes slower—consistent with typical engagement patterns. - Tyler Page(CEO)