December 2, 2024

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Cipher Mining Provides Second Quarter 2024 Business Update

Cipher Mining Provides Second Quarter 2024 Business Update

Current hashrate of ~8.7 EH/s on target for ~13.5 EH/s by end of 2024 and ~35.0 EH/s by end of 2025

Acquiring additional 1.7 GW of power capacity suitable for HPC infrastructure or bitcoin mining

Second Quarter 2024 GAAP Net Loss of $15m, and Non-GAAP Adjusted Loss of $3m

NEW YORK, Aug. 13, 2024 (GLOBE NEWSWIRE) — Cipher Mining Inc. (NASDAQ: CIFR) (“Cipher” or the “Company”) today announced results for its second quarter ended June 30, 2024, with an update on its operations and business strategy.

“We currently operate ~8.7 EH/s of self-mining hashrate and are on track to hit ~13.5 EH/s by year-end 2024, and ~35.0 EH/s by year-end 2025,” said Tyler Page, CEO of Cipher.

“In addition to constructing the 300 MW facility at Black Pearl, we are on track to close the acquisition of our new Reveille data center site with up to 200 MW of capacity and are pleased to announce we have executed a term sheet for an option to acquire three new sites with a cumulative power capacity of 1.5 GW. These sites are well-suited for both bitcoin mining and HPC data centers. With our operations and construction teams, which are led by seasoned experts who have built and run HPC data centers for some of the top hyperscalers in the world, we are uniquely positioned to maximize opportunities in both bitcoin mining and HPC infrastructure.”

“We expect developing HPC infrastructure will be complementary to our bitcoin mining business and that we can strike the right balance between the two business lines to drive significant shareholder value for many years,” concluded Mr. Page.

Finance and Operations Highlights

  • Upgrade of Odessa site bringing total self-mining hashrate to ~13.5 EH/s on track for Q4 2024
  • Construction of 300 MW data center at Black Pearl underway with expected energization in Q2 2025
  • Acquisition of Reveille data center site with up to 200 MW of capacity well-suited for HPC data centers expected to close soon
  • Executed term sheet for option to acquire 1.5 GW of new sites in North America suitable for both HPC or bitcoin mining data centers
  • Q2 2024 GAAP diluted net loss of $0.05 per share, and non-GAAP diluted adjusted loss of $0.01 per share

Business Update Call and Webcast

The live webcast and a webcast replay of the conference call can be accessed from the investor relations section of Cipher’s website at https://investors.ciphermining.com. To access this conference call by telephone, register here to receive dial-in numbers and a unique PIN to join the call.

About Cipher

Cipher is an emerging technology company focused on the development and operation of bitcoin mining data centers. Cipher is dedicated to expanding and strengthening the Bitcoin network’s critical infrastructure. Together with its diversely talented team and strategic partnerships, Cipher aims to be a market leader in bitcoin mining growth and innovation. To learn more about Cipher, please visit https://www.ciphermining.com/.

Forward Looking Statements

This press release contains certain forward-looking statements within the meaning of the federal securities laws of the United States. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Any statements made in this press release that are not statements of historical fact, including statements about our beliefs and expectations regarding our future results of operations and financial position, business strategy, timing and likelihood of success, potential expansion of and additional bitcoin mining data centers, expectations regarding the operations of mining centers, and management plans and objectives, are forward-looking statements and should be evaluated as such. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plan and strategies. These forward-looking statements generally are identified by the words “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “seeks,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “strategy,” “future,” “forecasts,” “opportunity,” “predicts,” “potential,” “would,” “will likely result,” “continue,” and similar expressions (including the negative versions of such words or expressions).

These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Cipher and our management, are inherently uncertain. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by such forward looking statements. New risks and uncertainties may emerge from time to time, and it is not possible to predict all risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: volatility in the price of Cipher’s securities due to a variety of factors, including changes in the competitive and regulated industry in which Cipher operates, variations in performance across competitors, changes in laws and regulations affecting Cipher’s business, and the ability to implement business plans, forecasts, and other expectations and to identify and realize additional opportunities. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 5, 2024, and in Cipher’s subsequent filings with the Securities and Exchange Commission. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Cipher assumes no obligation and, except as required by law, does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

Contacts:
Investor Contact:
Josh Kane
Head of Investor Relations at Cipher Mining
[email protected]

Media Contact:
Ryan Dicovitsky / Kendal Till
Dukas Linden Public Relations
[email protected]

CIPHER MINING INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except for share and per share amounts)
 
  June 30, 2024     December 31, 2023  
  (unaudited)        
ASSETS          
Current assets          
Cash and cash equivalents $ 122,557     $ 86,105  
Accounts receivable   286       622  
Receivables, related party   176       245  
Prepaid expenses and other current assets   3,599       3,670  
Bitcoin   138,079       32,978  
Derivative asset   44,702       31,878  
Total current assets   309,399       155,498  
Property and equipment, net   239,075       243,815  
Deposits on equipment   58,063       30,812  
Intangible assets, net   8,503       8,109  
Investment in equity investees   49,949       35,258  
Derivative asset   78,228       61,713  
Operating lease right-of-use asset   9,926       7,077  
Security deposits   22,246       23,855  
Other noncurrent assets   203        
Total assets $ 775,592     $ 566,137  
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities          
Accounts payable $ 13,733     $ 4,980  
Accounts payable, related party         1,554  
Accrued expenses and other current liabilities   17,855       22,439  
Finance lease liability, current portion   3,595       3,404  
Operating lease liability, current portion   1,262       1,166  
Warrant liability         250  
Total current liabilities   36,445       33,793  
Asset retirement obligation   19,337       18,394  
Finance lease liability   9,281       11,128  
Operating lease liability   9,181       6,280  
Deferred tax liability   10,577       5,206  
Total liabilities   84,821       74,801  
Commitments and contingencies (Note 13)          
Stockholders’ equity          
Preferred stock, $0.001 par value; 10,000,000 shares authorized, none issued and outstanding as of June 30, 2024 and December 31, 2023          
Common stock, $0.001 par value, 500,000,000 shares authorized, 335,557,872 and 296,276,536 shares issued as of June 30, 2024 and December 31, 2023, respectively, and 328,616,426 and 290,957,862 shares outstanding as of June 30, 2024, and December 31, 2023, respectively   336       296  
Additional paid-in capital   802,610       627,822  
Accumulated deficit   (112,168 )     (136,777 )
Treasury stock, at par, 6,941,446 and 5,318,674 shares at June 30, 2024 and December 31, 2023, respectively   (7 )     (5 )
Total stockholders’ equity   690,771       491,336  
Total liabilities and stockholders’ equity $ 775,592     $ 566,137  
           
CIPHER MINING INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for share and per share amounts)
(unaudited)
 
  Three months ended June 30,     Six months ended June 30,  
  2024     2023     2024     2023  
Revenue – bitcoin mining $ 36,808     $ 31,224     $ 84,945     $ 53,119  
Costs and operating expenses (income)                      
Cost of revenue   14,281       15,868       29,101       24,009  
Compensation and benefits   16,285       12,668       29,321       24,605  
General and administrative   8,365       8,667       14,442       14,150  
Depreciation and amortization   20,251       14,412       37,495       26,067  
Change in fair value of derivative asset   (21,980 )     (3,222 )     (29,339 )     (8,550 )
Power sales   (1,109 )     (5,651 )     (2,282 )     (5,749 )
Equity in losses (gains) of equity investees   577       1,431       (161 )     2,181  
Losses (gains) on fair value of bitcoin   16,309       (860 )     (24,247 )     (5,124 )
Other gains                     (2,260 )
Total costs and operating expenses (income)   52,979       43,313       54,330       69,329  
Operating (loss) income   (16,171 )     (12,089 )     30,615       (16,210 )
Other income (expense)                      
Interest income   1,053       25       1,839       101  
Interest expense   (372 )     (485 )     (772 )     (886 )
Change in fair value of warrant liability         (22 )     250       (59 )
Other income (expense)   727       (12 )     (1,231 )     (12 )
Total other income (expense)   1,408       (494 )     86       (856 )
(Loss) income before taxes   (14,763 )     (12,583 )     30,701       (17,066 )
Current income tax expense   (335 )     (31 )     (721 )     (48 )
Deferred income tax expense   (193 )     (584 )     (5,371 )     (637 )
Total income tax expense   (528 )     (615 )     (6,092 )     (685 )
Net (loss) income $ (15,291 )   $ (13,198 )   $ 24,609     $ (17,751 )
Net (loss) income per share – basic and diluted $ (0.05 )   $ (0.05 )   $ 0.08     $ (0.07 )
Weighted average shares outstanding – basic   314,353,742       249,127,664       305,497,621       248,892,181  
Weighted average shares outstanding – diluted   314,353,742       249,127,664       316,652,300       248,892,181  
CIPHER MINING INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 
  Six months ended June 30,  
  2024     2023  
Cash flows from operating activities          
Net income (loss) $ 24,609     $ (17,751 )
Adjustments to reconcile net income (loss) to net cash used in operating activities:          
Depreciation   37,192       26,067  
Amortization of intangible assets   303        
Amortization of operating right-of-use asset   565       452  
Share-based compensation   21,654       17,988  
Equity in (gains) losses of equity investees   (161 )     2,181  
Non-cash lease expense   762       878  
Other operating activities   (1,839 )      
Income taxes   5,371       637  
Bitcoin received as payment for services   (85,281 )     (52,836 )
Change in fair value of derivative asset   (29,339 )     (8,550 )
Change in fair value of warrant liability   (250 )     59  
Gains on fair value of bitcoin   (24,247 )     (5,124 )
Changes in assets and liabilities:          
Accounts receivable   336       (282 )
Receivables, related party   69       (512 )
Prepaid expenses and other current assets   71       4,994  
Security deposits   1,609       (12 )
Other non-current assets   (203 )      
Accounts payable   (47 )     (185 )
Accounts payable, related party         (1,529 )
Accrued expenses and other current liabilities   (2,745 )     6,323  
Lease liabilities   (417 )     (594 )
Net cash used in operating activities   (51,988 )     (27,796 )
Cash flows from investing activities          
Proceeds from sale of bitcoin   10,334       52,475  
Deposits on equipment   (35,748 )     (2,932 )
Purchases of property and equipment   (15,766 )     (28,541 )
Purchases and development of software   (698 )      
Prepayments on financing leases         (3,676 )
Capital distributions from equity investees         3,807  
Investment in equity investees   (20,435 )     (3,095 )
Net cash (used in) provided by investing activities   (62,313 )     18,038  
Cash flows from financing activities          
Proceeds from the issuance of common stock   163,276       2,821  
Offering costs paid for the issuance of common stock   (2,868 )     (76 )
Repurchase of common shares to pay employee withholding taxes   (7,237 )     (1,114 )
Principal payments on financing lease   (2,418 )     (2,059 )
Net cash provided by (used in) financing activities   150,753       (428 )
Net increase (decrease) in cash and cash equivalents   36,452       (10,186 )
Cash and cash equivalents, beginning of the period   86,105       11,927  
Cash and cash equivalents, end of the period $ 122,557     $ 1,741  
  Six months ended June 30,  
  2024     2023  
Supplemental disclosure of noncash investing and financing activities          
Reclassification of deposits on equipment to property and equipment $ 13,799     $ 72,130  
Bitcoin received from equity investees $ 5,907     $ 317  
Settlement of related party payable related to master services and supply agreement $ 1,554     $  
Right-of-use asset obtained in exchange for finance lease liability $ 3,414     $ 14,212  
Equity method investment acquired for non-cash consideration $     $ 1,926  
Sales tax accrual on machine purchases $     $ 1,837  
Finance lease cost in accrued expenses $     $ 2,034  
 

Non-GAAP Financial Measures

The following are reconciliations of our Adjusted Earnings, in each case excluding the impact of (i) the non-cash change in fair value of derivative asset, (ii) share-based compensation expense, (iii) depreciation and amortization, (iv) deferred income tax expense, (v) nonrecurring gains and losses and (vi) the non-cash change in fair value of warrant liability, to the most directly comparable GAAP measures for the periods indicated (in thousands):

    Three months ended June 30,     Six months ended June 30,  
    2024     2023     2024     2023  
Reconciliation of Adjusted Earnings:                        
Net (loss) income   $ (15,291 )   $ (13,198 )   $ 24,609     $ (17,751 )
Change in fair value of derivative asset     (21,980 )     (3,222 )     (29,339 )     (8,550 )
Share-based compensation expense     13,336       9,178       21,654       17,988  
Depreciation and amortization     20,251       14,412       37,495       26,067  
Deferred income tax expense     193       584       5,371       637  
Other gains – nonrecurring                       (2,260 )
Change in fair value of warrant liability           22       (250 )     59  
Adjusted (loss) earnings     (3,491 )     7,776       59,540       16,190  
Reconciliation of Adjusted (loss) earnings per share:                        
Adjusted (loss) earnings   $ (3,491 )   $ 7,776     $ 59,540     $ 16,190  
Weighted average shares outstanding – diluted     314,353,742       249,127,664       316,652,300       248,892,181  
Adjusted (loss) earnings per share   $ (0.01 )   $ 0.03     $ 0.19     $ 0.07  

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