Cipher Mining NASDAQ: CIFR reported third-quarter 2026 revenue of $27 million, up from $25 million in the prior quarter, as the company recognized its first high-performance computing, or HPC, lease revenue from its Black Pearl campus.
The company, which described itself during the call as Cipher Digital, said its strategy centers on acquiring powered land, developing data-center infrastructure and leasing capacity under long-term colocation agreements to creditworthy technology tenants. Chief Executive Officer Tyler Page said demand for compute capacity remains strong despite market volatility, rising construction costs and a more selective financing environment.
“Tenant demand across our pipeline has never been stronger,” Page said, adding that Cipher is focused on long-term colocation rather than operating as a “neocloud” provider that directly supplies computing chips to customers.
Barber Lake lease expansion boosts contracted revenue
A central development in the quarter was an amended lease at the Barber Lake campus. The agreement extended the base lease term by 10 years and lifted total contracted revenue at the site to approximately $9.1 billion, including $5.2 billion of incremental rent.
Page said the revised agreement established a phased delivery schedule, with individual data halls expected to come online from the fourth quarter of 2026 through the first quarter of 2027. The tenant has started deploying compute equipment at the facility, according to the company.
Chief Financial Officer Greg Mumford said Cipher agreed to invest additional capital in the project in exchange for the longer lease term, added contracted revenue and what management characterized as improved project economics. Tenant requirements changed during construction, resulting in about $409 million of change orders. Under the amendment, the tenant will reimburse about $50 million, while Cipher will invest the remaining $359 million.
The company also agreed to share higher construction costs with its tenant, including costs related to scope changes, inflation and labor. Mumford said Cipher expects to recover the tenant’s share through rent over the lease term at a contracted return.
Following the amendment, Cipher expects Barber Lake’s cost to rise to about $13 million per IT megawatt, compared with the prior financed cost of $10.4 million per IT megawatt. Management said the added lease revenue restores the project’s average yield on cost to roughly 15%.
Construction progress across three contracted campuses
Cipher said its three contracted HPC campuses total 700 gross megawatts and represent approximately $16.6 billion of contracted revenue over the next two decades. The leases carry a weighted average term of 17.3 years. If all extension options are exercised, contracted revenue would reach approximately $28.4 billion, according to the company.
- Black Pearl: Cipher delivered first capacity in August ahead of schedule at the tenant’s request and recognized its first HPC lease revenue in the third quarter. It has delivered 18 megawatts of critical IT capacity, while remaining phase-one data halls are progressing through mechanical, electrical and plumbing fit-out.
- Barber Lake: Construction remains on schedule, and the final data hall at the grid-connected facility is expected in the first quarter of 2027. Cipher acquired 685 acres of adjacent land for potential expansion.
- Stingray: Earthwork, grading and pad preparation are nearing completion, while steel erection is progressing. Shell construction is expected to be completed in the fourth quarter.
The company also said its Odessa Bitcoin mining site produced approximately 296 Bitcoin during the quarter. Cipher is evaluating the potential to monetize Odessa as an HPC development site, citing its power-purchase agreement, long-lead equipment and existing infrastructure.
Pipeline, on-site generation and Texas development
Cipher said its operating assets, contracted developments and future pipeline total approximately 6.8 gigawatts of capacity, including potential on-site generation. The company’s near-term opportunity pipeline totals about 5.9 gigawatts.
During the quarter, Cipher began developing lateral natural-gas pipelines that could support as much as 2.5 gigawatts of on-site generation. Page said the first power from these projects could become available as early as late 2027. The company is in early commercial discussions involving roughly 1 gigawatt of data-center leases supported by on-site generation.
Cipher also cited progress within Texas’s ERCOT process. It received Batch Zero classifications for several sites, including a conditional base-load classification for 1 gigawatt at Mikeska. The company expects final classifications in December following completion of a data-center audit.
In addition, Cipher said its Colchis site received a conditional base-load designation and has been expanded to 622 acres. The company is in discussions with multiple prospective counterparties for the 1-gigawatt site but said a final lease would likely require completed interconnection approval.
The company acquired Horizon, a 70-megawatt Texas site with an executed utility interconnection agreement that is expected to energize in 2029.
Financing and quarterly results
After the quarter ended, Cipher issued $850 million of zero-coupon convertible senior notes due in 2032, with a conversion price of $15.31 per share. It used part of the proceeds to fund the Barber Lake lease amendment. The company also spent approximately $90 million on a capped call intended to offset dilution up to $28.35 per share.
Cipher simultaneously retired more than 90% of its 1.75% convertible notes due 2030 by exchanging approximately $166 million of the notes for common stock. Mumford said total debt was approximately $6.7 billion, including $4.5 billion of non-recourse project-level secured notes and $2.2 billion of parent-level convertible notes. Net debt was approximately $3 billion after cash and cash equivalents.
Pro forma for the October offering and Barber Lake funding, Cipher reported approximately $724 million of unrestricted cash and cash equivalents. Management said its contracted projects are funded through completion.
GAAP net income was $32 million in the third quarter, compared with a $268 million net loss in the second quarter. The change was primarily driven by a $127 million non-cash gain on the company’s warrant liability, compared with a $151 million non-cash loss in the previous quarter. Adjusted EBITDA improved to a $10 million loss from a $30 million loss in the second quarter.
Cipher sold 632 Bitcoin for $45.5 million of cash proceeds during the quarter, recording a realized gain of $0.5 million. The company also said it, Fluidstack and Anthropic committed a combined $10 million to water-infrastructure upgrades in Colorado City.
About Cipher Mining (NASDAQ:CIFR)
Cipher Mining Inc NASDAQ: CIFR is a bitcoin mining company that develops and operates large-scale data center infrastructure in the United States. The company uses specialized application-specific integrated circuit (ASIC) computers to validate transactions on the Bitcoin network and earn bitcoin rewards.
Cipher focuses on securing access to cost-effective power, building and managing mining facilities, and deploying high-performance computing equipment. Its operations are supported by power infrastructure, cooling systems, networking equipment and other data center technologies required for energy-intensive digital asset mining.
The company was formed through the combination of Cipher Mining Technologies Inc and Good Works Acquisition Corp.
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