Cipher Mining Inc. (CIFR)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 printed strong sequential recovery: revenue $42.22M, GAAP net income $18M ($0.05 EPS), and adjusted earnings $51M ($0.14 EPS), driven by the Odessa fleet upgrade and bitcoin price strength .
• Operations scaled materially: self-mining hashrate reached ~13.5 EH/s at year-end; Phase 1 of Black Pearl (150 MW, ~9.5+ EH/s) remains on track to energize in Q2 2025, and total site pipeline expanded to ~2.8 GW .
• Strategic expansion accelerated: acquired the 100 MW Stingray site (energize Q2 2026) and signed an MOU to add 500 MW adjacent to Barber Lake (available 2029); also purchased 337 acres to expand Barber Lake footprint to 587 acres .
• Key accounting/market dynamics: reversal of prior quarter PPA derivative headwind with ~$11M gain this quarter, while depreciation rose on a shift to 3-year rig life; cost of revenue increased 21% sequentially due to opportunistic grid power purchases during curtailments .
• Potential stock catalysts: HPC tenant/financing progress (SoftBank PIPE $50M and short-term exclusivity), Black Pearl energization in Q2 2025, and tangible hashrate growth to “at least” ~23 EH/s by Q3 2025 .

What Went Well and What Went Wrong

What Went Well

• Odessa upgrade executed on time, lifting self-mining to ~13.5 EH/s and improving fleet efficiency to ~17.6 J/TH at Odessa; “We successfully upgraded our Odessa fleet, which grew our total self-mining hashrate to approximately 13.5 EH/s.” — Tyler Page .
• Strong sequential growth: “Top-line revenue grew 75% quarter-over-quarter…driven by the successful completion of our Odessa mining rig upgrade…and the continued price appreciation of bitcoin.” — CFO Ed Farrell .
• Pipeline and site expansion: signed an MOU for 500 MW adjacent to Barber Lake and acquired 337 acres; “We recently signed a memorandum of understanding…This would result in a total potential capacity of 800 MW at Barber Lake.” — Tyler Page .

What Went Wrong

• Cost of revenues up 21% QoQ due to strategic grid purchases during curtailment periods at Odessa to maintain profitability, even as fixed PPA remains a core cost advantage .
• Depreciation up 27% QoQ and 73% YoY as rigs were upgraded and useful life was reduced from 5 to 3 years to reflect faster upgrade cycles .
• Continued volatility in PPA derivative valuation: prior Q3 saw a ~$49M loss; Q4 recovered ~$11M, highlighting ongoing mark-to-market swings even as fixed-price power remains a structural advantage .

Financial Results

Note: Wall Street consensus via S&P Global was unavailable at the time of this report due to access limitations.

Segment detail (bitcoin mining revenue only):

KPIs:

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We successfully upgraded our Odessa fleet, which grew our total self-mining hashrate to approximately 13.5 EH/s…We are also nearing the completion of Phase I of Black Pearl, which remains on track to energize in the second quarter of this year.” — Tyler Page .
• “We had a strong fourth quarter as our top line revenue grew 75% quarter-over-quarter…driven by…Odessa…upgrade…and the continued price appreciation of bitcoin…. GAAP net earnings of $18 million…adjusted earnings…$51 million.” — Ed Farrell .
• “We recently signed a memorandum of understanding to…include an additional 500-megawatt data center adjacent to the current 300-megawatt [Barber Lake] site…total potential capacity of 800 megawatts.” — Tyler Page .
• “Our fixed price contract at Odessa runs until the end of July 2027…we now have the ability to…purchase power from the market if we are curtailed.” — Tyler Page .

Q&A Highlights

• SoftBank exclusivity and pipeline: Management noted NDA and exclusivity until end of week of Feb 28; active tenant and financing dialogues across Barber Lake, Black Pearl, and eastern 3M sites .
• Odessa PPA and curtailment strategy: ~2.5 years remaining; added ability to buy grid power during curtailment if profitable, preserving unit economics; potential future front-of-the-meter pricing post-2027 .
• Black Pearl Phase 2 evaluation: Daily analysis of HPC vs bitcoin mining; prioritizing HPC given tenant/financing interest but will proceed with mining if a tenant isn’t solidified within months .
• HPC lease terms vs mining economics: Preference for long-term (e.g., 15-year) creditworthy leases that are financeable (up to ~80% debt) even if cash returns are modestly lower than near-term mining peaks; diversifies and smooths cyclicality .
• Capex outlook: ~$200M remaining to complete Phase 1 (Infra ~$50M, Rigs ~$150M) over 6 months; Phase 2 ($260M) optional depending on market/tenant outcomes .

Estimates Context

• Wall Street consensus for revenue and EPS via S&P Global was unavailable at the time of this report due to access limitations. As a result, we cannot classify Q4 as a beat or miss versus consensus in this report.
• Estimate revisions are likely to reflect: (1) higher run-rate hashrate and improved post-upgrade efficiency at Odessa ; (2) increased depreciation under the new 3-year schedule ; (3) the tactical use of grid power during curtailments affecting cost of revenue variability ; and (4) incremental optionality from HPC tenant/financing progress and Barber Lake capacity expansion .

Key Takeaways for Investors

• Sequential inflection: Q4 delivered a material swing to profitability with revenue up 75% QoQ and adjusted earnings of $51M, anchored by the Odessa upgrade and bitcoin price appreciation .
• Structural cost advantage: Fixed-price Odessa PPA and ~2.7c/kWh weighted average power prices underpin best-in-class unit economics; new curtailment power purchase capability adds flexibility .
• Scaling roadmap: “At least” ~23 EH/s by Q3 2025 with Black Pearl Phase 1 energization in Q2 2025; Barber Lake and Stingray add medium-term capacity, with Barber Lake potentially rising to 800 MW by 2029 .
• HPC optionality: Active tenant/financing dialogues (including SoftBank affiliation) can de-risk and finance large builds; long-term leases offer diversified, financeable cash flows vs mining cyclicality .
• Non-GAAP vs GAAP: Expect continued volatility from derivative mark-to-market and higher depreciation; adjusted earnings better reflect core operations and cash generation potential .
• Liquidity mix: Year-end liquidity leaned heavily on BTC treasury ($92M) vs cash ($6M); subsequent PIPE and production cash flows support Phase 1 capex funding .
• Near-term trading: Watch for HPC tenant announcements and Q2 Black Pearl energization milestones; BTC price and ERCOT curves will drive reported GAAP swings (derivative asset) and unit economics .