Cipher Mining Provides First Quarter 2024 Business Update

In this article:
Cipher Mining Inc.Cipher Mining Inc.
Cipher Mining Inc.

First Quarter 2024 GAAP Net Income of $40m, and Non-GAAP Adjusted Earnings of $63m

First Quarter 2024 Revenues of $48m

Current Self-Mining Hash Rate of ~7.7 EH/s and on track to reach ~9.3 EH/s by end of Third Quarter 2024, with plans to grow to ~25.1 EH/s by end of 2025

NEW YORK, May 07, 2024 (GLOBE NEWSWIRE) -- Cipher Mining Inc. (NASDAQ: CIFR) (“Cipher” or the “Company”) today announced results for its first quarter ended March 31, 2024, with an update on its operations and deployment strategy.

“We are delighted to announce results for the first quarter of 2024 in which we delivered another quarter of record net income on both a GAAP and Non-GAAP basis,” said Tyler Page, CEO of Cipher.

“We continue to invest heavily in our expansion, and the early stages of construction at our new Black Pearl data center are well underway. We’ve already cleared and leveled over 50 acres, and we will start laying concrete foundations this month. Because of this progress, and our strong financial position, we have decided to accelerate our plans and build the entire 300 MW data center in 2025. We expect to be at ~9.3 EH/s by the end of Q3 2024, and at least ~25.1 EH/s by the end of 2025.”

“We are confident our team’s proven execution and the Company’s best-in-class unit economics will continue to position Cipher as a top miner in this new post-halving environment.”

Finance and Operations Highlights

  • Produced first quarter 2024 GAAP net income of $40 million, and non-GAAP adjusted earnings of $63 million

  • 30 MW expansion at each of Bear and Chief JV data centers, delivering an additional ~1.25 EH/s of self-mining capacity, on track for completion in second quarter 2024

  • 300 MW data center at Black Pearl on track for energization in 2025 with land cleared and leveled for construction

Business Update Call and Webcast

Cipher will host a conference call and webcast today at 8:00 a.m. Eastern Time to discuss the first quarter 2024 results and management’s outlook for operations and growth plans. 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)

 

 

March 31, 2024

 

 

December 31, 2023

 

 

(unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

Current assets

 

 

 

 

 

Cash and cash equivalents

$

88,675

 

 

$

86,105

 

Accounts receivable

 

680

 

 

 

622

 

Receivables, related party

 

430

 

 

 

245

 

Prepaid expenses and other current assets

 

2,910

 

 

 

3,670

 

Bitcoin

 

123,307

 

 

 

32,978

 

Derivative asset

 

34,228

 

 

 

31,878

 

Total current assets

 

250,230

 

 

 

155,498

 

Property and equipment, net

 

238,541

 

 

 

243,815

 

Deposits on equipment

 

30,187

 

 

 

30,812

 

Intangible assets, net

 

8,162

 

 

 

8,109

 

Investment in equity investees

 

52,621

 

 

 

35,258

 

Derivative asset

 

66,722

 

 

 

61,713

 

Operating lease right-of-use asset

 

6,823

 

 

 

7,077

 

Security deposits

 

23,855

 

 

 

23,855

 

Total assets

$

677,141

 

 

$

566,137

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable

$

7,520

 

 

$

4,980

 

Accounts payable, related party

 

-

 

 

 

1,554

 

Accrued expenses and other current liabilities

 

18,661

 

 

 

22,439

 

Finance lease liability, current portion

 

3,595

 

 

 

3,404

 

Operating lease liability, current portion

 

1,204

 

 

 

1,166

 

Warrant liability

 

-

 

 

 

250

 

Total current liabilities

 

30,980

 

 

 

33,793

 

Asset retirement obligation

 

18,708

 

 

 

18,394

 

Finance lease liability

 

10,121

 

 

 

11,128

 

Operating lease liability

 

6,025

 

 

 

6,280

 

Deferred tax liability

 

10,383

 

 

 

5,206

 

Total liabilities

 

76,217

 

 

 

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 March 31, 2024 and December 31, 2023

 

-

 

 

 

-

 

Common stock, $0.001 par value, 500,000,000 shares authorized, 312,649,102 and 296,276,536 shares issued as of March 31, 2024 and December 31, 2023, respectively, and 306,543,330 and 290,957,862 shares outstanding as of March 31, 2024, and December 31, 2023, respectively

 

313

 

 

 

296

 

Additional paid-in capital

 

697,494

 

 

 

627,822

 

Accumulated deficit

 

(96,877

)

 

 

(136,777

)

Treasury stock, at par, 6,105,772 and 5,318,674 shares at March 31, 2024 and December 31, 2023, respectively

 

(6

)

 

 

(5

)

Total stockholders’ equity

 

600,924

 

 

 

491,336

 

Total liabilities and stockholders’ equity

$

677,141

 

 

$

566,137

 

 

 

 

 

 

 


CIPHER MINING INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for share and per share amounts)
(unaudited)

 

 

Three months ended March 31,

 

 

2024

 

 

2023

 

Revenue - bitcoin mining

$

48,137

 

 

$

21,895

 

Costs and operating expenses (income)

 

 

 

 

 

Cost of revenue

 

14,820

 

 

 

8,141

 

Compensation and benefits

 

13,036

 

 

 

11,937

 

General and administrative

 

6,077

 

 

 

5,483

 

Depreciation and amortization

 

17,244

 

 

 

11,655

 

Change in fair value of derivative asset

 

(7,359

)

 

 

(5,328

)

Power sales

 

(1,173

)

 

 

(98

)

Equity in (gains) losses of equity investees

 

(738

)

 

 

750

 

Gains on fair value of bitcoin

 

(40,556

)

 

 

(4,264

)

Other gains

 

-

 

 

 

(2,260

)

Total costs and operating expenses (income)

 

1,351

 

 

 

26,016

 

Operating income (loss)

 

46,786

 

 

 

(4,121

)

Other income (expense)

 

 

 

 

 

Interest income

 

786

 

 

 

76

 

Interest expense

 

(400

)

 

 

(401

)

Change in fair value of warrant liability

 

250

 

 

 

(37

)

Other expense

 

(1,958

)

 

 

-

 

Total other income (expense)

 

(1,322

)

 

 

(362

)

Income (loss) before taxes

 

45,464

 

 

 

(4,483

)

Current income tax expense

 

(386

)

 

 

(17

)

Deferred income tax expense

 

(5,178

)

 

 

(53

)

Total income tax expense

 

(5,564

)

 

 

(70

)

Net income (loss)

$

39,900

 

 

$

(4,553

)

Net income (loss) per share - basic and diluted

$

0.13

 

 

$

(0.02

)

Weighted average shares outstanding - basic

 

296,641,499

 

 

 

248,654,082

 

Weighted average shares outstanding - diluted

 

304,397,979

 

 

 

248,654,082

 


CIPHER MINING INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

 

 

Three months ended March 31,

 

 

2024

 

 

2023

 

Cash flows from operating activities

 

 

 

 

 

Net income (loss)

$

39,900

 

 

$

(4,553

)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

 

 

Depreciation

 

17,097

 

 

 

11,655

 

Amortization of intangible assets

 

147

 

 

 

-

 

Amortization of operating right-of-use asset

 

254

 

 

 

222

 

Share-based compensation

 

8,317

 

 

 

8,810

 

Equity in (gains) losses of equity investees

 

(738

)

 

 

750

 

Non-cash lease expense

 

392

 

 

 

401

 

Other operating activities

 

1,958

 

 

 

-

 

Income taxes

 

5,564

 

 

 

53

 

Bitcoin received as payment for services

 

(48,079

)

 

 

(21,717

)

Change in fair value of derivative asset

 

(7,359

)

 

 

(5,328

)

Change in fair value of warrant liability

 

(250

)

 

 

37

 

Gains on fair value of bitcoin

 

(40,556

)

 

 

(4,264

)

Changes in assets and liabilities:

 

 

 

 

 

Accounts receivable

 

(58

)

 

 

(183

)

Receivables, related party

 

(185

)

 

 

(189

)

Prepaid expenses and other current assets

 

760

 

 

 

2,975

 

Security deposits

 

-

 

 

 

(12

)

Accounts payable

 

2,540

 

 

 

2,913

 

Accounts payable, related party

 

-

 

 

 

(1,529

)

Accrued expenses and other current liabilities

 

(6,123

)

 

 

65

 

Lease liabilities

 

(217

)

 

 

(248

)

Net cash used in operating activities

 

(26,636

)

 

 

(10,142

)

Cash flows from investing activities

 

 

 

 

 

Proceeds from sale of bitcoin

 

-

 

 

 

20,958

 

Deposits on equipment

 

(4,536

)

 

 

(1,106

)

Purchases of property and equipment

 

(7,902

)

 

 

(17,947

)

Purchases and development of software

 

(200

)

 

 

-

 

Capital distributions from equity investees

 

-

 

 

 

3,807

 

Investment in equity investees

 

(18,319

)

 

 

(3,094

)

Net cash (used in) provided by investing activities

 

(30,957

)

 

 

2,618

 

Cash flows from financing activities

 

 

 

 

 

Proceeds from the issuance of common stock

 

66,171

 

 

 

-

 

Offering costs paid for the issuance of common stock

 

(1,623

)

 

 

-

 

Repurchase of common shares to pay employee withholding taxes

 

(3,177

)

 

 

(481

)

Principal payments on financing lease

 

(1,208

)

 

 

-

 

Net cash provided by (used in) financing activities

 

60,163

 

 

 

(481

)

Net increase (decrease) in cash and cash equivalents

 

2,570

 

 

 

(8,005

)

Cash and cash equivalents, beginning of the period

 

86,105

 

 

 

11,927

 

Cash and cash equivalents, end of the period

$

88,675

 

 

$

3,922

 

Supplemental disclosure of noncash investing and financing activities

 

 

 

 

 

Reclassification of deposits on equipment to property and equipment

$

5,161

 

 

$

71,533

 

Bitcoin received from equity investees

$

1,694

 

 

$

317

 

Settlement of related party payable related to master services and supply agreement

$

1,554

 

 

$

-

 

Equity method investment acquired for non-cash consideration

$

-

 

 

$

1,925

 

Property and equipment purchases in accounts payable, accounts payable, related party and accrued expenses

$

-

 

 

$

5,940

 

Deposits on equipment in accounts payable, accounts payable, related party and accrued expenses

$

-

 

 

$

691

 

Finance lease cost in accrued expenses

$

-

 

 

$

1,017

 


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 March 31,

 

 

 

2024

 

 

2023

 

Reconciliation of Adjusted Earnings:

 

 

 

 

 

 

Net income (loss)

 

$

39,900

 

 

$

(4,553

)

Change in fair value of derivative asset

 

 

(7,359

)

 

 

(5,328

)

Share-based compensation expense

 

 

8,317

 

 

 

8,810

 

Depreciation and amortization

 

 

17,244

 

 

 

11,655

 

Deferred income tax expense

 

 

5,178

 

 

 

53

 

Other gains - nonrecurring

 

 

-

 

 

 

(2,260

)

Change in fair value of warrant liability

 

 

(250

)

 

 

37

 

Adjusted earnings

 

 

63,030

 

 

 

8,414

 


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