Cipher Mining Inc. (CIFR) | The Buildout — AI Infrastructure
The Verdict
Cipher Digital develops and operates industrial-scale data centers. It originates land and grid interconnections, designs and builds powered campuses, and leases the critical IT capacity inside them to hyperscale tenants on long-term triple-net terms. It is the landlord layer of the AI buildout — it does not sell chips, computing, or models. Most of its revenue still comes from bitcoin mining, a business management is deliberately winding down.
| Market Cap | — |
| Revenue (TTM) | $191M |
| Revenue Growth | +20.2% |
| EBITDA Margin (TTM) | -123.4% |
| Net Debt | $1.5B |
| Earnings Beats | 2 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Three signed data center campus leases anchor 907 MW of operating and contracted capacity, with AWS, FluidStack backed by Google, and an unnamed investment-grade hyperscaler as tenants.
- Contracted NOI guidance has been raised twice, from $669M to $787M to ~$793M average annualized for October 2026 through September 2036; the 2035 figure rose from $754M to $892M.
- Execution has been verifiable: Black Pearl's initial capacity was delivered two months early with rent commenced, and Barber Lake topped out in 127 days on a roughly 800,000 sq ft structure with zero lost-time incidents.
- Three project-level nonrecourse financings are complete. The third, $810M of senior secured notes at a 6% coupon, was ~8x oversubscribed and funded ~98% of project costs; management says it priced tighter than prior bonds despite widening credit spreads.
- 477 MW of 2027 capacity — Odessa 207 MW plus Reveille 70 MW plus Ulysses 200 MW — is interconnection-approved and outside the ERCOT batch process.
What We’re Watching
- ERCOT Batch Zero timing after Governor Abbott's 2026-08-03 letter requesting an audit of interconnection-queue attestations. Management gave no new date; the process gates Colchis, Mikeska, McLennan, the Apollo studied load, and the Stingray and Barber Lake expansions.
- Revenue has fallen each quarter as mining winds down. Barber Lake rent is expected to begin October 2026, so the September quarter is still lean.
- No new lease has been signed since March 2026, despite two quarters of management describing the best demand environment it has seen.
- Stingray was re-timed from a fourth-quarter 2026 energization target to first-half 2027 delivery, and Milsing moved from a 2028–2029 Batch 0 slot to Batch 1 and the 2030-plus bucket.
The direction is consistent: the business is moving from mining revenue toward a contracted, investment-grade-backed HPC base, and management keeps delivering on construction and financing. What has slipped is timing — two delivery dates moved later and the ERCOT batch catalyst was delayed with no new date. The thesis is intact but increasingly dependent on converting an unleased ~4.4 GW pipeline into signed paper. The open question is whether the 477 MW of 2027 capacity outside the batch process gets leased while the 2028-and-beyond pipeline waits on ERCOT.
Earnings
Q2 2026 revenue was $25M, down from $35M in Q1, reflecting the decommissioning of bitcoin mining at Black Pearl. The GAAP net loss was $268M, or $0.65 per diluted share, versus a $114M loss, or $0.28 per share, in the prior quarter; the increase was primarily driven by a $150.5M noncash warrant remeasurement loss compared with a $43.6M noncash gain in Q1. Interest income was $36M and interest expense $67M.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $25M | $35M | $44M | −43.1% |
| Gross margin | -131.1% | -105.9% | 28.9% | -16000bps |
| EBITDA | −$52M | −$29M | −$1M | +6450.0% |
| EPS | $-0.65 | $-0.28 | $-0.12 | +435.1% |
| Average annualized contracted NOI | ~$793M | ~$787M | n/a | — |
I'm proud to say our team delivered on that commitment. The first data center capacity at Black Pearl was delivered in August, 2 full months ahead of the original schedule and rent has commenced at the site.— Tyler Page, Chief Executive Officer, 2026-08-04
Management tone: Management's framing shifted between the two calls. On the Q1 call it was proving the model — "We are no longer an aspirational HPC developer." On the Q2 call it asserted scale, describing Cipher as "one of the largest developers of hyperscale infrastructure in the country," and used unhedged language about demand and lease terms. It was also direct about what it did not know: it declined to give a new ERCOT date, volunteered that construction budgets will rise on labor and equipment inflation, and qualified its no-equity stance with a caveat that a very large lease could change it.
Management Guidance
Management guided to average annualized contracted NOI from three executed leases for October 2026 through September 2036, and pointed to $892M of contracted NOI in 2035. Barber Lake Phase 1 delivery is targeted for September 2026 with rental payments commencing October 2026; Stingray delivery is expected in the first half of 2027; Reveille and Ulysses are targeted to add 270 gross MW in 2027; Colchis, Mikeska and McLennan add ~2 GW in 2028–2029; and Milsing, Apollo, the Barber Lake expansion and the Stingray expansion add up to ~2.1 GW in 2030 and beyond. Management said it does not expect to require additional equity based on its current forecast, with the caveat that a very large lease could require it. It added that budgeting will go up on labor and equipment inflation, which it expects to translate into a higher cost per megawatt.
Trajectory
Reported revenue is in a designed trough. It went $60M in Q4 2025, $35M in Q1 2026 and $25M in Q2 2026 as bitcoin mining was decommissioned at Black Pearl. The audited trailing data shows the same arc — $59.7M of revenue in Q4 FY2025 against $24.8M in Q2 FY2026 — with gross margin of -131.1% and EBITDA of -$52.4M in the latest quarter, reflecting the mining wind-down and the absence of HPC rent. The step-up is contracted rather than hoped for: Black Pearl rent has commenced and Barber Lake rental payments are expected to begin in October 2026. Trailing-twelve-month revenue is $191.0M with EBITDA of -$235.6M.
The Model
The model projects FY+1 revenue of $215.0M with EBITDA of -$76M, a -35.15% margin, and FY+2 revenue of $784.0M with EBITDA of $448M, a 57.1% margin. The near term reflects a company still in the mining wind-down, with HPC rent only beginning to arrive. The FY+2 step-up depends on contracted capacity converting to rent — Barber Lake rent beginning October 2026 and Stingray delivery in the first half of 2027 — and on pipeline capacity coming online in 2028 and beyond.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $224M | $215M | $784M |
| YoY Growth | — | −4.0% | +264.7% |
| EBITDA | −$149M | −$76M | $448M |
| EBITDA Margin | -66.7% | -35.1% | 57.1% |
Projections are the median of 4 independent model runs.
Management guided to average annualized contracted NOI from three executed leases for October 2026 through September 2036, and pointed to $892M of contracted NOI in 2035. Barber Lake Phase 1 delivery is targeted for September 2026 with rental payments commencing October 2026; Stingray delivery is expected in the first half of 2027; Reveille and Ulysses are targeted to add 270 gross MW in 2027; Colchis, Mikeska and McLennan add ~2 GW in 2028–2029; and Milsing, Apollo, the Barber Lake expansion and the Stingray expansion add up to ~2.1 GW in 2030 and beyond. Management said it does not expect to require additional equity based on its current forecast, with the caveat that a very large lease could require it. It added that budgeting will go up on labor and equipment inflation, which it expects to translate into a higher cost per megawatt.
What Could Go Right — and Wrong
- ERCOT Batch Zero includes Colchis, Mikeska, McLennan, the Apollo studied load and the expansions, moving ~2 GW of 2028–2029 capacity from expected to in process.
- Reveille (70 MW) and Ulysses (200 MW) convert advanced tenant discussions into signed leases, adding 270 gross MW in 2027; management says it expects all those available megawatts to end up leased.
- Odessa (207 MW) converts to HPC after a renegotiated Vistra Luminant power purchase agreement, putting first megawatts online near the end of 2027.
- A fourth project-level financing prices at or inside the 6% coupon on Stingray, showing the lease-amortizing model is repeatable.
- Behind-the-meter generation moves from a lateral-pipeline announcement to a named structure with capacity, adding megawatts outside the batch process and outside current NOI guidance.
- ERCOT Batch Zero slips again, or the audit removes load from Cipher's sites, pushing the ~2 GW 2028–2029 bucket to the right against fixed debt service.
- Another quarter passes with no new lease signed despite management's best-ever demand commentary.
- Construction cost per megawatt keeps rising on labor and equipment inflation and cannot be passed through to tenants; management says budgets will go up and that current builds are running at the contingency level.
- A project financing prices materially above 6%, or the company raises equity — management has already conceded equity is possible for a very large lease.
- A counterparty event at AWS, FluidStack, or the Google backstop changes the risk profile of the contracted NOI base.
Looking Ahead
The next twelve months turn on converting contracted capacity into cash. Barber Lake Phase 1 delivery is targeted for September 2026 with rent expected in October 2026, Stingray delivery is targeted for the first half of 2027, and Reveille and Ulysses are targeted for Q3 2027 and Q4 2027 energization. The ERCOT Batch Zero outcome, still without a date after Governor Abbott's August 2026 letter, gates the 2028 pipeline. Management says it does not expect to need additional equity based on its current forecast.
- September 2026Barber Lake Phase 1 delivery — First large-scale HPC capacity delivery; tests the contracted NOI guide.
- October 2026Barber Lake rent begins — First large HPC rental payment; starts the contracted revenue ramp.
- Q3 2026Stingray construction build-out — Earthwork, pad prep and substation electrical work under way; delivery targeted for the first half of 2027.
- H1 2027Stingray delivery — Third campus delivered with ~75% equipment secured and fully financed.
- 2027Reveille, Ulysses leases — 270 gross MW targeted; both still unsigned as of the Q2 update.
- End of 2027Odessa first HPC megawatts — Conditional on a lease and a renegotiated Vistra Luminant PPA.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $151M | $224M | $191M | +48.1% |
| Gross Margin | 13.2% | 28.3% | -20.0% | +1,508bps |
| EBITDA | $60M | −$149M | −$236M | -348.4% |
| EBITDA Margin | 39.7% | -66.7% | -123.4% | 10,640bps |
| Net Income | −$45M | −$822M | −$1.1B | -1739.6% |
| Free Cash Flow | −$391M | −$615M | −$1.0B | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)-20.0%
- EBITDA Margin (TTM)-123.4%
- Net Margin (TTM)-586.0%
- ROIC-14.6%
- SBC / Revenue47.5%
The Company
Cipher Mining Inc., now operating and rebranded as Cipher Digital, develops and operates industrial-scale data centers. It originates land and grid interconnections, designs and builds powered campuses, and leases the critical IT megawatts inside them to hyperscale and hyperscaler-backed tenants on long-term triple-net leases. The product is powered real estate for AI compute. The 10-K describes an intentional evolution "from a pure-play bitcoin miner into a vertically integrated data center development and operations platform focused on energy-intensive compute infrastructure."
The 10-K reports two segments, HPC Data Centers and Bitcoin Mining, while the 10-Q states the company currently has one operating segment, Bitcoin Mining — the mechanical result of no HPC revenue being recognized yet. Cipher manages procurement in-house rather than outsourcing it, which management calls a differentiator, and works backwards from the longest-lead-time equipment before agreeing a schedule with a tenant. Footprint is concentrated in Texas, with one Ohio site at Ulysses. The operating and contracted base is 907 MW across three campuses, out of ~5.3 GW across 11 sites.
Business Segments
Competitive Landscape
The 10-K names two groups of competitors: HPC and colocation providers (CoreWeave, Digital Realty, Equinix, Vantage Data Centers and Aligned Data Centers) and bitcoin miners that have expanded into HPC services and signed leases with hyperscalers (Hut 8, IREN, TeraWulf, Core Scientific and Applied Digital). The compiled criticality read is that if Cipher could not deliver, hyperscalers would likely find alternative capacity from other developers without meaningful delay, since many competitors offer similar sites and power availability in key markets. The peer read-through describes the differentiator as power and interconnection rather than technology, and management points to delivered speed — Black Pearl two months early — as what sets it apart.
- CoreWeaveNamed in the 10-K among HPC/colocation competitors; not discussed.
- Digital RealtyNamed in the 10-K among HPC/colocation competitors; not discussed.
- EquinixNamed in the 10-K among HPC/colocation competitors; not discussed.
- Named in the 10-K among bitcoin miners that have expanded into HPC and signed hyperscaler leases; not discussed.
- IREN LimitedNamed in the 10-K among bitcoin miners that have expanded into HPC and signed hyperscaler leases; not discussed.
Supply Chain
Cipher sits between the grid and its tenants: it buys power, interconnection, land, EPC labor and long-lead equipment, then leases turnkey data center capacity to hyperscalers. One competitor, CleanSpark, mentioned Cipher by name on its own call, citing the 6% Stingray bond as a sign of lease quality.
More on CIFR: Earnings recap