Release Date: May 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Cipher Mining Inc (CIFR, Financial) reported a 16% increase in revenue for Q1 2025, reaching $49 million, driven by higher bitcoin production and prices.
- The company achieved a 6.5% increase in bitcoin production at its Odessa data center, mining 524 bitcoins in Q1 2025.
- Cipher Mining Inc (CIFR) maintains a highly competitive power cost of $0.027 per kilowatt hour, contributing to its strong unit economics.
- The company has signed a term sheet with Fortress Credit Advisors, LLC for financing at Barber Lake, enhancing its data center development capabilities.
- Cipher Mining Inc (CIFR) has a robust pipeline with expected capacity expansion of approximately 2.8 gigawatts, positioning it for future growth.
Negative Points
- Cipher Mining Inc (CIFR) reported a GAAP net loss of $39 million for Q1 2025, impacted by a $20 million unrealized loss on bitcoin holdings.
- The company experienced higher depreciation expenses due to the full depreciation of new machines installed at Odessa, affecting bottom-line results.
- Despite revenue growth, Cipher Mining Inc (CIFR) faced a significant decrease in adjusted earnings year-over-year, from $63 million to $6 million.
- The company is navigating uncertainties related to tariffs on mining rig deliveries, which could impact future operations and costs.
- Cipher Mining Inc (CIFR) faces challenges in securing tenants for its data centers amid a competitive and evolving market landscape.
Q & A Highlights
Q: On the Fortress announcement, could you provide more clarity on the terms of the financing arrangement for Barber Lake?
A: Tyler Page, CEO: At a high level, it will be a joint venture with Fortress as our financing partner. They will backstop the financing of a full data center build, with the amount varying depending on the tenant's specifications. We have the right to own up to 49% of the JV, contributing our assets like land and interconnects. The exact economics will depend on lease rates and market conditions for data centers.
Q: Since the tariff announcements in early April, have you seen any changes in conversations with potential partners or tenants?
A: Tyler Page, CEO: The pace of conversations has not abated; if anything, they have increased. We've had more inquiries from large investors and tenants globally. The interest from well-known hyperscalers continues at a steady pace, and we haven't seen any change in interest levels since the tariff announcements.
Q: Can you elaborate on your financing strategy with Fortress at Barber Lake and how it might differ from other bitcoin miners?
A: Tyler Page, CEO: We have a lot of optionality and are excited about it. Our partnership with Fortress is a first step to validate our ability to land a great tenant with a big lease. This strategy allows us to avoid financing at bitcoin mining cost of capital, which is expensive. We aim to capture as much of the economics as possible for Cipher and our shareholders.
Q: How are things progressing with ERCOT and obtaining additional power capacity across your sites?
A: Tyler Page, CEO: There is a bill in the Texas legislature that will tweak how developers enter the interconnection queue, which we think is positive. It will bring more reality and transparency to the queue. While it may make it more challenging to get an interconnect, it also makes our existing large interconnects more valuable.
Q: Regarding the new machines and tariffs, what's the current thinking on the impact for new deliveries?
A: Tyler Page, CEO: We anticipate a 10% universal non-China tariff on deliveries. We are finalizing discussions with mining rig manufacturers and hope to announce good news related to tariffs soon. Despite the uncertainty, we feel confident in our projections for the next quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
