Cipher Mining Provides First Quarter 2024 Business Update
May 07 2024 - 7:00AM
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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