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 KaneHead of Investor Relations at Cipher Miningjosh.kane@ciphermining.com

Media Contact:Ryan Dicovitsky / Kendal TillDukas Linden Public RelationsCipherMining@DLPR.com

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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