Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported August 4, 2026 · Beat 2 of last 5 quarters
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Cipher's early delivery and successful project financing demonstrate execution capability in the AI infrastructure buildout, potentially strengthening its position with hyperscalers. The expanding 5.3 GW pipeline, including new site Apollo and behind-the-meter generation plans, signals continued growth in AI data center capacity, particularly in Texas. The ERCOT batch process delay could create near-term uncertainty but may also increase the value of Cipher's interconnection-approved sites.
Cipher delivered its first HPC capacity at Black Pearl two months early, with rent commencing. The company priced an $810 million bond for Stingray at a 6% coupon, its lowest yet, and secured an option on a new 900 MW site, Apollo. Construction progressed at Barber Lake (100% equipment secured) and Stingray (75% equipment secured). Revenue fell to $25 million from $35 million in Q1, reflecting the decommissioning of bitcoin mining at Black Pearl, while GAAP net loss widened to $268 million, driven by a $150.5 million noncash warrant remeasurement loss. Total assets rose 75% to $7.5 billion, with restricted project cash of $3.7 billion.
Management struck a confident tone, citing a 'flywheel' of compounding momentum: early delivery at Black Pearl, a third project-level bond priced at the lowest coupon yet, and a new 900 MW Apollo site option. They expect first rental payments at Barber Lake and Black Pearl in H2 2026, with Stingray delivery targeted for H1 2027. The 4.4 GW pipeline (including 270 MW available in 2027 at Reveille and Ulysses) is seeing strong tenant interest, and management believes lease terms are improving. They noted potential for behind-the-meter generation to be significant and reiterated no additional equity is expected near-term. The ERCOT batch process delay was acknowledged as a near-term uncertainty, but management believes Cipher is well-positioned at the front of the queue.
“Put simply, this business is building on itself in a way that compounds and the results are starting to show up, giving us an even clearer path to scale much larger.”
on Flywheel momentum
“Any developer can sign a lease. Far fewer can deliver ahead of schedule when a tenant asks for a faster time line without cutting corners or sacrificing quality.”
on Early delivery at Black Pearl
“We are engaged in HPC hosting lease discussions with a broad range of tenants at these sites, and we remain focused on securing the right deal for Cipher, not just the first deal available.”
on Demand environment
What are your initial reactions to Governor Abbott's letter and implications for Cipher?
Tyler said the letter reinforces the batch process theme of separating serious developers. Cipher has submitted water surveys and stands behind its attestations. He expects Cipher to be at the front of the queue, and noted the delay could increase the value of near-term megawatts outside the process (270 MW in 2027) and behind-the-meter generation.
How are tenant conversations going for Reveille and Ulysses, and can you get ahead of energization?
Tyler said demand is the strongest ever, with multiple interested parties. He emphasized striking the best possible deal—long-term, triple-net, high rents—and monitoring credit markets. He expects all available megawatts to be leased.
How were you able to deliver two months early, and is that repeatable?
Tyler credited the in-house construction team, largely ex-hyperscaler, and the ability to work closely with tenants. He noted a cap on expenses and willingness to use burst labor if funded. He said it's repeatable with a willing tenant, but there is a cost to negotiate.