Cipher Mining Inc.
08/13/2024 | Press release | Distributed by Public on 08/13/2024 05:19
Cipher Mining Provides Second Quarter 2024 Business Update Form 8 K
Cipher Mining Provides Second Quarter 2024 Business Update
Current hashrate of ~8.7 EH/s on target for ~13.5 EH/s by end of 2024 and ~35.0 EH/s by end of 2025
Acquiring additional 1.7 GW of power capacity suitable for HPC infrastructure or bitcoin mining
Second Quarter 2024 GAAP Net Loss of $15m, and Non-GAAP Adjusted Loss of $3m
NEW YORK-August 13, 2024-Cipher Mining Inc.(NASDAQ: CIFR) ("Cipher" or the "Company") today announced results for its second quarter ended June 30, 2024, with an update on its operations and business strategy.
"We currently operate ~8.7 EH/s of self-mining hashrate and are on track to hit ~13.5 EH/s by year-end 2024, and ~35.0 EH/s by year-end 2025," said Tyler Page, CEO of Cipher.
"In addition to constructing the 300 MW facility at Black Pearl, we are on track to close the acquisition of our new Reveille data center site with up to 200 MW of capacity and are pleased to announce we have executed a term sheet for an option to acquire three new sites with a cumulative power capacity of 1.5 GW. These sites are well-suited for both bitcoin mining and HPC data centers. With our operations and construction teams, which are led by seasoned experts who have built and run HPC data centers for some of the top hyperscalers in the world, we are uniquely positioned to maximize opportunities in both bitcoin mining and HPC infrastructure."
"We expect developing HPC infrastructure will be complementary to our bitcoin mining business and that we can strike the right balance between the two business lines to drive significant shareholder value for many years," concluded Mr. Page.
Finance and Operations Highlights
•
Upgrade of Odessa site bringing total self-mining hashrate to ~13.5 EH/s on track for Q4 2024
•
Construction of 300 MW data center at Black Pearl underway with expected energization in Q2 2025
•
Acquisition of Reveille data center site with up to 200 MW of capacity well-suited for HPC data centers expected to close soon
•
Executed term sheet for option to acquire 1.5 GW of new sites in North America suitable for both HPC or bitcoin mining data centers
•
Q2 2024 GAAP diluted net loss of $0.05 per share, and non-GAAP diluted adjusted loss of $0.01 per share
Business Update Call and Webcast
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
Media Contact:
Ryan Dicovitsky / Kendal Till
Dukas Linden Public Relations
CIPHER MINING INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except for share and per share amounts)
|
June 30, 2024 |
December 31, 2023 |
|||
|
(unaudited) |
||||
|
ASSETS |
||||
|
Current assets |
||||
|
Cash and cash equivalents |
$ |
122,557 |
$ |
86,105 |
|
Accounts receivable |
286 |
622 |
||
|
Receivables, related party |
176 |
245 |
||
|
Prepaid expenses and other current assets |
3,599 |
3,670 |
||
|
Bitcoin |
138,079 |
32,978 |
||
|
Derivative asset |
44,702 |
31,878 |
||
|
Total current assets |
309,399 |
155,498 |
||
|
Property and equipment, net |
239,075 |
243,815 |
||
|
Deposits on equipment |
58,063 |
30,812 |
||
|
Intangible assets, net |
8,503 |
8,109 |
||
|
Investment in equity investees |
49,949 |
35,258 |
||
|
Derivative asset |
78,228 |
61,713 |
||
|
Operating lease right-of-use asset |
9,926 |
7,077 |
||
|
Security deposits |
22,246 |
23,855 |
||
|
Other noncurrent assets |
203 |
- |
||
|
Total assets |
$ |
775,592 |
$ |
566,137 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||
|
Current liabilities |
||||
|
Accounts payable |
$ |
13,733 |
$ |
4,980 |
|
Accounts payable, related party |
- |
1,554 |
||
|
Accrued expenses and other current liabilities |
17,855 |
22,439 |
||
|
Finance lease liability, current portion |
3,595 |
3,404 |
||
|
Operating lease liability, current portion |
1,262 |
1,166 |
||
|
Warrant liability |
- |
250 |
||
|
Total current liabilities |
36,445 |
33,793 |
||
|
Asset retirement obligation |
19,337 |
18,394 |
||
|
Finance lease liability |
9,281 |
11,128 |
||
|
Operating lease liability |
9,181 |
6,280 |
||
|
Deferred tax liability |
10,577 |
5,206 |
||
|
Total liabilities |
84,821 |
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 June 30, 2024 and December 31, 2023 |
- |
- |
||
|
Common stock, $0.001 par value, 500,000,000 shares authorized, 335,557,872 and 296,276,536 shares issued as of June 30, 2024 and December 31, 2023, respectively, and 328,616,426 and 290,957,862 shares outstanding as of June 30, 2024, and December 31, 2023, respectively |
336 |
296 |
||
|
Additional paid-in capital |
802,610 |
627,822 |
||
|
Accumulated deficit |
(112,168 |
) |
(136,777 |
) |
|
Treasury stock, at par, 6,941,446 and 5,318,674 shares at June 30, 2024 and December 31, 2023, respectively |
(7 |
) |
(5 |
) |
|
Total stockholders' equity |
690,771 |
491,336 |
||
|
Total liabilities and stockholders' equity |
$ |
775,592 |
$ |
566,137 |
CIPHER MINING INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for share and per share amounts)
(unaudited)
|
Three months ended June 30, |
Six months ended June 30, |
||||||||||
|
2024 |
2023 |
2024 |
2023 |
||||||||
|
Revenue - bitcoin mining |
$ |
36,808 |
$ |
31,224 |
$ |
84,945 |
$ |
53,119 |
|||
|
Costs and operating expenses (income) |
|||||||||||
|
Cost of revenue |
14,281 |
15,868 |
29,101 |
24,009 |
|||||||
|
Compensation and benefits |
16,285 |
12,668 |
29,321 |
24,605 |
|||||||
|
General and administrative |
8,365 |
8,667 |
14,442 |
14,150 |
|||||||
|
Depreciation and amortization |
20,251 |
14,412 |
37,495 |
26,067 |
|||||||
|
Change in fair value of derivative asset |
(21,980 |
) |
(3,222 |
) |
(29,339 |
) |
(8,550 |
) |
|||
|
Power sales |
(1,109 |
) |
(5,651 |
) |
(2,282 |
) |
(5,749 |
) |
|||
|
Equity in losses (gains) of equity investees |
577 |
1,431 |
(161 |
) |
2,181 |
||||||
|
Losses (gains) on fair value of bitcoin |
16,309 |
(860 |
) |
(24,247 |
) |
(5,124 |
) |
||||
|
Other gains |
- |
- |
- |
(2,260 |
) |
||||||
|
Total costs and operating expenses (income) |
52,979 |
43,313 |
54,330 |
69,329 |
|||||||
|
Operating (loss) income |
(16,171 |
) |
(12,089 |
) |
30,615 |
(16,210 |
) |
||||
|
Other income (expense) |
|||||||||||
|
Interest income |
1,053 |
25 |
1,839 |
101 |
|||||||
|
Interest expense |
(372 |
) |
(485 |
) |
(772 |
) |
(886 |
) |
|||
|
Change in fair value of warrant liability |
- |
(22 |
) |
250 |
(59 |
) |
|||||
|
Other income (expense) |
727 |
(12 |
) |
(1,231 |
) |
(12 |
) |
||||
|
Total other income (expense) |
1,408 |
(494 |
) |
86 |
(856 |
) |
|||||
|
(Loss) income before taxes |
(14,763 |
) |
(12,583 |
) |
30,701 |
(17,066 |
) |
||||
|
Current income tax expense |
(335 |
) |
(31 |
) |
(721 |
) |
(48 |
) |
|||
|
Deferred income tax expense |
(193 |
) |
(584 |
) |
(5,371 |
) |
(637 |
) |
|||
|
Total income tax expense |
(528 |
) |
(615 |
) |
(6,092 |
) |
(685 |
) |
|||
|
Net (loss) income |
$ |
(15,291 |
) |
$ |
(13,198 |
) |
$ |
24,609 |
$ |
(17,751 |
) |
|
Net (loss) income per share - basic and diluted |
$ |
(0.05 |
) |
$ |
(0.05 |
) |
$ |
0.08 |
$ |
(0.07 |
) |
|
Weighted average shares outstanding - basic |
314,353,742 |
249,127,664 |
305,497,621 |
248,892,181 |
|||||||
|
Weighted average shares outstanding - diluted |
314,353,742 |
249,127,664 |
316,652,300 |
248,892,181 |
CIPHER MINING INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
|
Six months ended June 30, |
|||||
|
2024 |
2023 |
||||
|
Cash flows from operating activities |
|||||
|
Net income (loss) |
$ |
24,609 |
$ |
(17,751 |
) |
|
Adjustments to reconcile net income (loss) to net cash used in operating activities: |
|||||
|
Depreciation |
37,192 |
26,067 |
|||
|
Amortization of intangible assets |
303 |
- |
|||
|
Amortization of operating right-of-use asset |
565 |
452 |
|||
|
Share-based compensation |
21,654 |
17,988 |
|||
|
Equity in (gains) losses of equity investees |
(161 |
) |
2,181 |
||
|
Non-cash lease expense |
762 |
878 |
|||
|
Other operating activities |
(1,839 |
) |
- |
||
|
Income taxes |
5,371 |
637 |
|||
|
Bitcoin received as payment for services |
(85,281 |
) |
(52,836 |
) |
|
|
Change in fair value of derivative asset |
(29,339 |
) |
(8,550 |
) |
|
|
Change in fair value of warrant liability |
(250 |
) |
59 |
||
|
Gains on fair value of bitcoin |
(24,247 |
) |
(5,124 |
) |
|
|
Changes in assets and liabilities: |
|||||
|
Accounts receivable |
336 |
(282 |
) |
||
|
Receivables, related party |
69 |
(512 |
) |
||
|
Prepaid expenses and other current assets |
71 |
4,994 |
|||
|
Security deposits |
1,609 |
(12 |
) |
||
|
Other non-current assets |
(203 |
) |
- |
||
|
Accounts payable |
(47 |
) |
(185 |
) |
|
|
Accounts payable, related party |
- |
(1,529 |
) |
||
|
Accrued expenses and other current liabilities |
(2,745 |
) |
6,323 |
||
|
Lease liabilities |
(417 |
) |
(594 |
) |
|
|
Net cash used in operating activities |
(51,988 |
) |
(27,796 |
) |
|
|
Cash flows from investing activities |
|||||
|
Proceeds from sale of bitcoin |
10,334 |
52,475 |
|||
|
Deposits on equipment |
(35,748 |
) |
(2,932 |
) |
|
|
Purchases of property and equipment |
(15,766 |
) |
(28,541 |
) |
|
|
Purchases and development of software |
(698 |
) |
- |
||
|
Prepayments on financing leases |
- |
(3,676 |
) |
||
|
Capital distributions from equity investees |
- |
3,807 |
|||
|
Investment in equity investees |
(20,435 |
) |
(3,095 |
) |
|
|
Net cash (used in) provided by investing activities |
(62,313 |
) |
18,038 |
||
|
Cash flows from financing activities |
|||||
|
Proceeds from the issuance of common stock |
163,276 |
2,821 |
|||
|
Offering costs paid for the issuance of common stock |
(2,868 |
) |
(76 |
) |
|
|
Repurchase of common shares to pay employee withholding taxes |
(7,237 |
) |
(1,114 |
) |
|
|
Principal payments on financing lease |
(2,418 |
) |
(2,059 |
) |
|
|
Net cash provided by (used in) financing activities |
150,753 |
(428 |
) |
||
|
Net increase (decrease) in cash and cash equivalents |
36,452 |
(10,186 |
) |
||
|
Cash and cash equivalents, beginning of the period |
86,105 |
11,927 |
|||
|
Cash and cash equivalents, end of the period |
$ |
122,557 |
$ |
1,741 |
|
Six months ended June 30, |
||||
|
2024 |
2023 |
|||
|
Supplemental disclosure of noncash investing and financing activities |
||||
|
Reclassification of deposits on equipment to property and equipment |
$ |
13,799 |
$ |
72,130 |
|
Bitcoin received from equity investees |
$ |
5,907 |
$ |
317 |
|
Settlement of related party payable related to master services and supply agreement |
$ |
1,554 |
$ |
- |
|
Right-of-use asset obtained in exchange for finance lease liability |
$ |
3,414 |
$ |
14,212 |
|
Equity method investment acquired for non-cash consideration |
$ |
- |
$ |
1,926 |
|
Sales tax accrual on machine purchases |
$ |
- |
$ |
1,837 |
|
Finance lease cost in accrued expenses |
$ |
- |
$ |
2,034 |
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 June 30, |
Six months ended June 30, |
||||||||||
|
2024 |
2023 |
2024 |
2023 |
||||||||
|
Reconciliation of Adjusted Earnings: |
|||||||||||
|
Net (loss) income |
$ |
(15,291 |
) |
$ |
(13,198 |
) |
$ |
24,609 |
$ |
(17,751 |
) |
|
Change in fair value of derivative asset |
(21,980 |
) |
(3,222 |
) |
(29,339 |
) |
(8,550 |
) |
|||
|
Share-based compensation expense |
13,336 |
9,178 |
21,654 |
17,988 |
|||||||
|
Depreciation and amortization |
20,251 |
14,412 |
37,495 |
26,067 |
|||||||
|
Deferred income tax expense |
193 |
584 |
5,371 |
637 |
|||||||
|
Other gains - nonrecurring |
- |
- |
- |
(2,260 |
) |
||||||
|
Change in fair value of warrant liability |
- |
22 |
(250 |
) |
59 |
||||||
|
Adjusted (loss) earnings |
(3,491 |
) |
7,776 |
59,540 |
16,190 |
|
Reconciliation of Adjusted (loss) earnings per share: |
|||||||||
|
Adjusted (loss) earnings |
$ |
(3,491 |
) |
$ |
7,776 |
$ |
59,540 |
$ |
16,190 |
|
Weighted average shares outstanding - diluted |
314,353,742 |
249,127,664 |
316,652,300 |
248,892,181 |
|||||
|
Adjusted (loss) earnings per share |
$ |
(0.01 |
) |
$ |
0.03 |
$ |
0.19 |
$ |
0.07 |