Q3 2025 Cipher Mining Inc Earnings Call

Good day and welcome to the site for the mining third quarter 2025 business update conference call. After the speaker's presentation, there will be a question-and-answer session. To ask a question, please press *1 on your touchtone telephone. To remove yourself from the queue, please press *1 again. As a reminder, this call may be recorded. I would like to turn the call over to Courtney Knight, Head of Investor Relations. Please go ahead.

Good morning, and thank you for joining us on this conference call to address Cipher Mining's business update for the third quarter of 2025.

Joining me on the call today are Tyler Page, Chief Executive Officer; Greg Mumford, Chief Financial Officer; and Edward Farrell, Senior Adviser and former Chief Financial Officer.

Please note that our press release and presentation can be found on the Investor Relations section of.

company's website, where this conference call will also be simultaneously webcast.

Or other reproduction is expressly prohibited without prior consent.

Before we start, I'd like to remind you that the following discussion, as well as our press release and presentation, contain forward-looking statements.

These statements include, but are not limited to, diverse financial outlook business plans and objectives, and other future events and developments, including statements about the market potential of our business operations, potential competition, and our goals and strategies.

Forward-looking statements and risks in the conference call, including responses to your questions, are based on current expectations as of today in Cyprus and assume no obligation to update or revise them, whether as a result of new developments or otherwise, except as required by law.

Additionally, the following discussion, may contain non-gaap Financial measures. We may use non-gaap measures to describe the way in which we manage and operate our business.

We reconcile non-gaap measures to the most directly comparable, gaap measures, and you are encouraged to examine those reconciliations, which are filed at the end of our earnings release issued earlier this morning.

I will now turn the call over to our CEO, Tyler Page. Tyler.

Thanks, Courtney. Good morning, everyone, and thank you for joining us today. I'm Tyler Page, CEO of Cipher Mining, and I'm pleased to welcome you to our third quarter 2025 business update call.

The third quarter was truly transformative for Cypher, as we made huge strides on our strategic pivot into high-performance computing and space. We set the stage for what is, without question, the most exciting earnings update in our company's history.

This quarter, we executed a pivotal transaction with fluid stack and Google which firmly established our credibility in the HPC space.

Following that groundbreaking transaction, and leveraging that success, we've now taken another major step forward.

I'm thrilled to announce today that we've executed a second Landmark HPC transaction, this time with Amazon Web Services.

Partnering directly with one of the largest and most innovative companies in the world underscores Cypress's emergence as a trusted leader in next-generation compute infrastructure and confirms our full-scale transformation into an HPC data center developer.

Our first HPC deal with fluid stack and Google established. Not only ciphers credibility as a data center developer for the world's most demanding. Tenants, but also the desirability of more remote areas of Texas for Next Generation data centers.

We have been talking to investors for over a year about this thesis and saying that we thought the market would evolve in our direction.

Our second long-term lease, this time with Amazon, proves that neither we nor West Texas are one-hit wonders.

Our second lease faces the world's largest hyperscaler directly on a 15-year lease at very attractive terms. This is not a fluke and will not be our last HPC deal.

Under the agreement, we contracted 300 megawatts of gross capacity, and the project carries approximately $5.5 billion in contract revenue over the initial 15-year term.

The capacity will be delivered in two phases, beginning in July 2026 and completing in Q4 2026, with rent commencing in August 2026.

Given the strength of the lease we have secured, we believe that we will utilize debt financing to fund the majority of construction costs at the site. Any remaining construction obligations will be funded from cash on hand, with no need for further equity fundraising.

With these Milestones, Piper has officially arrived as a leader in the HPC Revolution harnessing our sourcing expertise energy assets, best-in-class team and operational excellence to power. The world's most advanced computing workloads

Continuing with that momentum.

We're proud to announce today that we secured ownership in a joint venture to develop a 1 gigawatt site in West Texas.

We expect to own approximately 95% of the JV. Once a turnkey HPC lease is executed assuming standard lease and development terms.

We are calling the site culus which refers to the mythical home of the Golden Fleece and was a land of legendary wealth located at the edge of the known world.

For the past year and a half conventional knowledge, in the traditional data center industry has been the hyperscalers would not venture outside of major metropolitan areas and that our sites were at the edge of the world but we have now conclusively, proven those incumbents wrong.

We will continue to do so at Culus.

This is the most significant addition to our development pipeline to date.

Direct Connect agreement with American Electric Power. Providing dual interconnection, capability and targeted power availability in 2028.

The transaction also includes options to purchase up to 620 acres of land adjacent to the existing substation.

The caucus site checks every box for a premier HPC development opportunity.

Ample acreage, large-scale power capacity, availability of diverse fiber, roots, and dual interconnection capability. We have already begun to have early-stage discussions with potential tenants for the site.

The execution of this transaction, once again, demonstrates our team's sourcing expertise and ability to secure some of the most attractive large-scale sites in the world.

Cipher is 1 of the few companies in the world that can combine boots on the ground. Expertise working directly with landowners to Source, best-in-class sites with the Deep technical sophistication needed to serve hyperscalers.

This unique and Powerful combination May Cipher exceptionally well positioned to bridge. The growing gap between the limited supply of suitable sites and surging, large-scale tenant demand.

The announcements we shared today are the results of years of hard work and the strong execution and momentum built over the past quarter. I'd like to take a moment to reflect on some of our third quarter successes.

At the Forefront of these highlights is our recent transaction with fluid stacking Google a transformative 10-year 168 critical it megawatt. AI hosting agreement that first position Cipher as a major developer in the HPC space.

Under this agreement Cipher will deliver 168 Mega of critical it load at our Barber Lake site in Colorado City, Texas.

The project is ported by up to 244 megawatts of total capacity. This project represents approximately $3 billion in contracted revenue over the initial 10-year term, with options that could extend the total contract value to roughly $7 billion over 20 years.

Notably, construction is already underway at the site, and we are on track to deliver the full 168 megawatts of critical IT capacity by September 30, 2026.

Importantly, Google is backstopping $1.4 billion of Fluid Stacks obligations to support projects and financing, and will receive warrants representing roughly a 5.4% pro forma equity stake in Cipher.

Cypher will retain full ownership of the site and is in the process of securing debt to fund construction. We will provide more details around that construction financing in the near future.

We believed and have now proven that Barber Lake was just the beginning. The first of several projects to capitalize on our team's sourcing expertise, proven development capabilities, strong industry relationships, and unmatched construction track record.

We look forward to continuing to partner with leading technology companies to secure HPC leases at our growing pipeline of sites.

This expansion is well supported by our successful $1.3 billion convertible offering completed this quarter.

This was the largest digital infrastructure convertible issuance to date.

And was roughly seven times oversubscribed, demonstrating investor confidence in our strategy and pipeline.

The strong demand allowed us to take advantage of favorable market conditions, securing a 0% coupon and further strengthening our balance sheet. Greg will discuss the convertible offering in further depth later on the call.

The Amazon transaction, the fluid stack in Google transaction at Barber Lake, the addition of significant new capacity at Kulkas, and our successful convertible offering all represent major milestones in advancing our HPC strategy.

Together, these achievements expand our business model, secure substantial future capacity, and strengthen our balance sheet, all positioning Cipher to capture the tremendous demand we're seeing and play a critical role in building the next generation of AI infrastructure.

As we scale and expand our business model, our Bitcoin mining business continues to generate meaningful cash flow. The company surpassed expectations this quarter and is now operating approximately 23.6 exahash per second of self-mining capacity.

The same discipline foundation we established in the Bitcoin mining space, delivering five data centers on time and on budget, will fuel our successful expansion into HPC.

Which highlights our execution across business lines and the strength of our pipeline going forward.

On the mining side of the business, this quarter we brought Black Pearl fully online, which grew our operational mining capacity from 423 megawatts to 477 megawatts across Odessa, Alvarez, Bear, Chief, and Black Pearl.

In doing so, we exceeded our previous hash rate projections and achieved a total self-mining hash rate of approximately 23.6 exahash per second.

In addition, our Fleet efficiency stands at an extremely impressive, 16.8 JW per terahash making us among the most efficient miners in the industry.

Our proprietary software which allows us to dynamically curtail our data centers as proven to be a critical advantage in optimizing. For profitability, maintaining low, power prices, and monetizing older rigs

This area of expertise is expected to remain a key competitive advantage in the future and, in fact, may be an increasingly valuable aspect of the business as the HPC landscape continues to evolve.

Importantly, our current mining operations are fully funded, and we do not anticipate further investment in that side of the business. As we prioritize our pipeline for HPC,

As discussed, this was a monumental quarter for Cipher in that we grew our contracted AI hosting capacity from zero last quarter to 544 megawatts this quarter across two transactions with world-class partners.

Behind that, we have a robust pipeline of 3.2, gigawatts of future capacity, that spans from 2025, to 2029 and Beyond.

While we are extremely proud of our mining production.

Market dynamics, scarcity of energy capacity, and frenzied demand from tenants have made it clear that the best use of our extensive pipeline of sites is for HPC workloads.

We are an ongoing discussions on our Pipeline with leading partners and look forward to prioritizing all of these sites for HPC development.

Let's now turn to a review of our current operations on both sides of the business.

At Barber Lake, we are constructing a data center for our industry-leading partners, Fluid Stack and Google.

Construction at the site is well underway. Ground has been broken and both engineering and procurement are progressing smoothly. We secured the necessary, labor force and locked in most of the long lead, time equipment, putting us in a strong position to meet all Key Construction, Milestones on schedule.

We are firmly on track to deliver the full 168 megawatts of critical IT capacity by September 30, 2026.

The lease is anticipated to commence the following month in October 2026.

Note that we still retain 56, megawatts of current capacity at Barber Lake.

These additional megawatts allow us to pursue an additional collocation agreement potentially prioritizing different deal elements.

Or to deploy our own compute at the site.

Our team is carefully assessing the merits of all potential options to maximize the value of the remaining 56 megawatts in Phase 1.

In addition, we maintain an MOU on an additional 500-megawatt upside at the site, which would come online in 2029 to 2030.

Given the site's ongoing development potential and live deal discussions, we look forward to providing further updates as things progress.

Starting to our current mining operations. Slide 9 has a production summary across our 5 operational mining sites.

Odessa is still the most significant part of our portfolio, representing approximately 56% of our Bitcoin production in Q3.

As of September, the current operating hash rate at the site is approximately 11.3 exahash per second, using approximately 207 megawatts.

Odessa's fleet efficiency stands at roughly 17.62 per terahash.

On this page, we also provide the observed all-in electricity cost per Bitcoin at our five sites.

Moving down the page. Black Pearl. Began contributing significant cash flow to the business in the third quarter.

The first 150 megawatts at the 300 megawatt site.

We are currently mining at approximately 10.1 exahashes per second, exceeding prior guidance and contributing approximately 36% of production in this quarter.

Lastly, we provided a combined overview of our joint venture, Data Centers of Allure, Spare, and Chief.

The three sites have a total power capacity of 120 megawatts and generate approximately 4.4 exahash per second.

We own 49% of the JV sites and our portion recently generated roughly 9% of our overall Bitcoin production in the third quarter.

Let's now shift to an update on our development portfolio.

7 provides an overview of our next to energize site in Andrews County, Texas, called Stingray.

The site features 100 megawatts of front of the meter capacity. All necessary regulatory approvals and 250 acres of land adjacent to the transmission assets.

In the third quarter, we continued development of the substation for the site and secured long lead time items, including transformers and high voltage breakers.

The site is on track to energize in the fourth quarter of 2026.

Slide 12 outlines additional capacity spanning 2027 and beyond.

Reveli, located in Kula, Texas, is on track to energize in Q2 2027.

The site is fully approved for 70 megawatts and we have initiated development of the substation.

Given both Stingray and Revy have secured interconnect approvals and established energization timelines, we have engaged with multiple prospective tenants and are in ongoing discussions to secure the most attractive lease agreements for these locations.

Our three M's, Mesa, Myling, and McLennon, are all currently undergoing final interconnection approval processes, and load studies have been completed at all three sites.

The interim Encore feas have been signed with Encore for Mesa and McLennan, and the required deposits have been paid.

We're targeting up to 500 megawatts of capacity at each of these sites. In addition to interconnection, rights are purchase options. Also included are significant land parcels at each location, all of which are well suited for HPC data center development.

We are confident. These sites will be in high demand as development progresses.

Last on this page is Culus, which, as mentioned, is our latest site acquisition and the most substantial addition to our pipeline today.

The site features a fully executed 1 gigawatt Direct Connect agreement with American Electric Power, providing dual interconnection capability and targeted power availability in 2028.

The site is roughly 80 miles Southwest of the abalene and around 80 miles. Southeast of our Barber Lake facility.

As mentioned, the site is extremely well suited for HPC. Given its ample acreage large-scale, power capacity, availability of diverse, fiber roads and dual interconnection capability.

Last quarter, we discussed our strategy to position Cipher ahead of the curve in anticipation of the evolving AI data center landscape.

Since then, we have executed two Landmark HBC transactions, as well as our most significant pipeline addition to date.

With the industry moving even faster than we had anticipated, we are more confident than ever that Cipher is among the best-positioned companies in the world to seize the near-term opportunities created by the growing power shortfall.

Simply put, we are just getting started.

I will now turn it over to our new CFO. Greg Mumford for a review of our third quarter financials.

Thanks, Tyler, and good morning to everyone on the call.

I'm excited to join today's call as ciphers new Chief Financial Officer. It's a privilege to be part of such an Innovative company that's playing a key role in the evolution of digital infrastructure and high performance computing.

I want to start by expressing my gratitude to Ed Farrell for his leadership and many contributions over the past five years.

Ed has built a world-class finance organization and leaves behind a strong foundation that positions Cipher well for its next phase of growth.

The company is fortunate to have his continued guidance as a senior adviser during this transition period.

As I step into this role, my focus will be on maintaining a disciplined approach to our financial strategy.

Broadening access to new funding sources and optimizing our overall cost of capital.

We'll continue to take a thoughtful approach to capital allocation, ensuring we're maximizing sustainable long-term growth and driving value for our shareholders.

I'm excited to work with Tyler, the leadership team and our talented Finance organization to build on Cypher strong momentum.

2025, which ended on September 30th.

I'd like to highlight that this quarter was marked not only by strong execution, as we officially expanded into our HPC hosting and grew our pipeline, but also by disciplined capital raising that positions us to sustain and accelerate that momentum moving forward.

During the quarter, we completed our second convertible offering: an upsized private placement of $1.3 billion of 0% convertible senior notes due 2031.

This transaction reflected strong investor demand and confidence in Cipher's long-term strategy.

The notes were issued with an initial conversion premium of approximately $16.33 per share, representing a 37.5% premium to our stock price at issuance.

We also entered Cap's, call transactions, that increase the effect of conversion price to approximately 23.32 per share substantially, reducing potential dilution to our shareholders.

The net proceeds from the offering were used to fund the cost of entering into the caps called transactions and will be used for construction at our two currently contracted HPC sites to advance our HPC strategy across our now 3.2 gigawatt development pipeline and for working capital and general corporate purposes.

Importantly, this financing bolsters our balance sheet and reflects our disciplined approach to growth.

We're very pleased with the market reception and believe this transaction position Cipher well to capture, the significant opportunities ahead in HPC and digital infrastructure.

Let's now turn to a review of our financials, beginning with our sequential financial performance, outlined on Slide 14.

In the third quarter, our hash rate increased by 40% driven by the energization and ramp up of our black pearl facility. Where Phase 1 of the 150 megawatt front of the meter site came online, in June,

Black pearls began the quarter, contributing approximately 3.4 extra exahash per second and ramped up to approximately 10.1 exahash per second during the quarter.

This led to a 35% increase in production, as well as an increase in our electricity costs per Bitcoin. Given Black Pearl is a front-of-the-meter site.

The higher cost per Bitcoin was also driven by an increase in network hash rate over the quarter.

Moving down the slide, we reported $72 million in revenue, up 65% from $44 million in the prior quarter.

This growth was driven primarily by the increase in bitcoin price and the increased production from Black Pearl.

For the quarter, we reported a GAAP net loss of $1 million, or $0.01 per share, compared to a net loss of $46 million, or $0.12 per share, in the prior quarter.

We are proud of the substantial quarter-over-quarter improvement in our results, particularly given that bottom-line performance was impacted by higher depreciation expenses.

This depreciation reflects the assets placed into service at Black Pearl, including the deployment of the latest generation rigs, as well as the upgrade at Odessa completed in Q4 2024.

Additionally, the bottom line continues to be influenced by changes in the fair value of our power purchase agreement at Odessa.

These expected fluctuations reflect movements in four power prices and the decaying time value of the remaining contract term, which extends through July 2027.

As Ed has previously noted. The true benefit of this contract lies in, its provision of long-term low cost fixed price, power for our disa operations.

This quarter as part of the execution of our HPC. Lisa Barber Lake. We granted Google warrants as compensation for their commitment to back. Stop to lease payments from our tenant fluid stack.

These warrants are recorded at fair value. As a result, this quarter we recognize a $32 million gain in the change of fair value of the warrant liability.

Excluding non-cash expenses such as the change in fair value of our power purchase agreement, share-based compensation, depreciation and amortization, and deferred income taxes.

The change in the fair value of the warrant liability and non-recurring losses. We reported a third quarter adjusted earnings of $41 million, or $0.10 per share, up roughly 34% from $30 million last quarter.

Cash and cash equivalents increased significantly, driven by the $1.2 billion of net proceeds from our most recent convertible financing.

Let's move on to slide 15 and take a deeper. Look at the results of our operations.

For the quarter, we mined 383 Bitcoin at Odessa and 246 at Black Pearl, bringing our total production to 629 Bitcoin mined in total across our wholly owned sites.

Ated 72 million, in Revenue at an average price of roughly 1114 per Bitcoin.

This compares to the 434 Bitcoin mined in Q2 2025 at an average price of $99,700 per Bitcoin, resulting in $44 million in revenue.

GNA expenses, which include IT corporate insurance, professional fees, and other public company costs, decreased slightly both sequentially, quarter over quarter, and year over year.

Appreciation and amortization, expense totaled. $60 million up from prior periods driven by the deployment of the new mining rigs over the last 12 months.

Our oldest rigs in the fleet will be fully depreciated in Q4, but those rigs can remain productive and continue to generate attractive returns when deployed strategically.

We recognize the small unrealized gain on our Bitcoin holdings this quarter, compared to a $17 million gain in Q2, reflecting a modest increase in the spot price at quarter end.

We finished the quarter holding approximately 1,500 Bitcoin and Treasury.

On our non-GAAP reconciliation, we reported a gap in that loss of $3 million. Adjusting for $44 million in non-cash and one-time items results in adjusted earnings of $41 million for the quarter, up from $30 million in the previous quarter.

Now, let's turn our attention to the balance sheet.

on slide 17 total current assets at quarter end were 1.4 billion up from 220 Million last quarter driven, primarily by the net proceeds of the 1.3 billion we received from our convertible offering

As we have discussed in our previous earnings calls, we actively manage our treasury. We neither sell nor hold every Bitcoin mined, and we remain disciplined in our approach to capital management.

I'll quickly cover some additional balance sheet line items as of September 30th.

EPA totaled $650 million, up 37% from $474 million.

This increase is primarily related to equipment deployed at Black Pearl.

Deposits on equipment of 8 million down from 183 Million. Last quarter is primarily related to the reclassification of rigs at Black Pearl from deposits to in-use, property and equipment.

At the end of the third quarter, our equity interests in the outdoors, Bear, and Chief Jay-Z's stood at $42 million.

Moving down the balance sheet, derivative assets were up primarily due to the inclusion of $90 million of cap calls associated with the new convertible note, which raises the effect of conversion price of the convertible debt and, effectively, minimizes potential dilution to shareholders.

Current liabilities increased this quarter due to the short-term classification of the Google warrants associated with the fluid faculties at Barbara Lake.

Lastly, and importantly, I want to highlight that short-term borrowings remain at zero.

We can continue to manage the balance sheet conservatively ensuring we're well positioned to meet any Capital needs.

Before we conclude, I'd like to thank everyone for joining today's call. We're proud of the tremendous progress we've made this quarter and the transformative growth we've achieved as we continue to expand our business lines, grow our pipelines, and strengthen our balance sheet to support that growth.

As always, we remain firmly, committed to disciplined execution, Capital efficiency and delivering long-term value for our shareholders.

Thank you as a reminder. If you'd like to ask

A question. Please press * 1 1.

If your question hasn't been answered, and you'd like to remove yourself from the queue, please press star 1 1 again.

Our first question comes from Paul Golding with McQuarrie, your line is open.

Thanks so much and congrats on the, uh, announcement and all the progress on HPC. Um, I wanted to start off with the question around the deal itself. Um,

300 Grouse megawatts Stingray. You have uh on track for energization 100 megawatts in 26 and Barbara Lake. You have 56 megawatts. Um, after the fluid stack deal, how should we think about the um,

Have a follow-up. Thank you so much.

Sure, thanks Paul, thanks for the questions. So let me start with the framework that uh, the ink is still drying on the deal we signed with AWS. So, there's some element of finalizing basis of design involved in getting you, the exact numbers that will be represented. So they are taking 300 gross. Um, we are recutting an existing air cooled 150 megawatts. Uh, so there will be a quick time to market with the first phase of that build. The second build, we are still finalizing design. And some of the debates that are happening are between, uh, speed to Market, so speed to availability of the compute versus optimizing for highest, um, critical it load, uh, possible. Um, that's not finalized yet. So, I I'd say that in general. If, if the whole site ends up air cooled, the Pua will be in line.

Line, uh, with the design we've got at Barber Lake, which shakes out at about 1.4 1.45, um, depending on the balance of what might be used, uh, with more of a liquid cooled approach. Um, we could improve that by having the second phase, have a higher, or sorry, a lower Pua, a more efficient puee. Um, so still shaking out exactly where those numbers will be as far as cost goes would

You referenced it would be in line with again, Barbara Lake what we've done in the past. We would expect the cost per critical it megawatt to be in line with that estimate.

Thanks so much, Tyler. If not better, because we do have some infrastructure in place already that was bought in a cheaper market.

Got it, appreciate that color. And then you also, uh, mentioned debt. Financing is a majority uh, of, uh, of capex sourcing and then cash on hand. Are you able to give any more detail around? Uh,

Financing plans in terms of, uh, you're already developing the fluid stack capacity. So, is this cash on hand from prepayment deposits? And, uh, is there any kind of backstop here to help support project financing or going to market for that?

Let me give some high-level framework for that, and then Greg can chime in if he wants to talk about any specifics. So, um, two different structures. Obviously, the first deal is with Fluid Stack and Google. That structure looks similar to one that's been out there in the market. Um, fair to say, we'll be looking to pursue our debt financing options for that in the coming days and weeks. And, um, I would expect, you know, depending on where the market is, those structures are not too dissimilar. So, um, you know, that's how we would envision probably how that shakes out, um, on the AEW.

Us lease, you know that is a direct facing hyperscaler lease. I think it's the first of its kind among anyone that has converted from Bitcoin mining. Uh to do a long-term, you know, 15-year direct facing a hyperscaler. Lease. That should be very financeable as far as the um the sort of equity support for whatever shakes out in the final terms for that financing. Um, keep in mind, we upsized the convert, we did recently quite a bit. The market was so favorable uh that it went up all the way up to 1.3 billion dollar offering. So we already have a fair amount of excess cash on hand and by all estimates we've got that should support. What we would anticipate to be the equity piece of the financing to to build the structure related to the AWS lease. Greg, would you give any other further color? Or is that enough? Do you think?

Yeah, I mean taller. I think you you said it right earlier is that we're not prepared to give specifics on the financing that we're looking at for the Google flue stack deal, but we are foreign opportunities and we'll be hopefully updating the market in short order.

As it relates to the, the AWS uh deal. We think that there's going to be a lot of opportunities in front of us to explore uh different types of project or Construction level financing. And we're going to work through those options and and make sure that we're making the right decision.

Thanks so much.

Thank you. Our next question comes from, Greg Lewis with btig. Your line is open.

Yes, thank you. And um good morning and then thank you for taking my questions. Um,

Ballpark, you know how things are progressing at what you're seeing at our cot. You know, you have the different fee that the MS that you you have referenced, you know, 500 megawatts. You know, when did those get in the queue? Um, you know, obviously we have some power coming online in 26. Um, just kind of an overall update on on how we should be thinking about availability of power from that growth pipeline that you have.

Sure, um so let me give some color as it relates on the sites that are waiting final or cut approval. So a lot of this shakes down to. Um so first of all they've been in the queue for a while and all load studies and everything have been submitted. Um a little bit on the timing expectation shakes out to the the sort of business operating model of the particular transmission distribution, service provider you're working with. Um, so in the case of coleus, you know, we're anticipating a 2028 energization. Um, we have already paid a, a kayak so construction, uh, and advancing construction payment to assist with the work that the tdsp has to do. Um, that's with a and a is confident moving forward with that construction based on an expectation of having that site energized by 2028. Um,

So then, that's where we are there. I mean, construction will be progressing on the AEP side, and we are in live discussions while they await that final approval from Ott. Um, at Mikeska and McLennan, we have signed interim FEAs, so that’s a requirement of the TDSP there, which is Encore.

so, uh,

In those cases again, the deposits paid, but the construction will likely be on the Encore side. Once that final arcott approval is in hand which we're anxiously awaiting. Um, and then myling, we have not paid a deposit yet again, working with a different tdsp their, um, their process works a little bit different. So, um, that's kind of the overall picture. Um,

And as far as you know, UROT goes. It's hard to make any prediction, uh, with exact specificity. However, given the progress in anticipation of where we think those sites will be available and the feedback from the TDS PS, we're confident in the timelines we've given.

Okay, super helpful and then, um, on the optionality of, of the 56 megawatts, um, I I think you mentioned, potentially, um, you know, maybe offering your own, uh, you know, AI cloud services. Um, could you talk a little bit about, um,

You know how we're thinking about that in terms of, you know, just bringing on another customer. Maybe there's an option that could be extended um, you know, just how we should think about that. 56. Megawatts. And and maybe around the time I mean is is this something we want to kind of have buttoned up in the next 12 1824 months or you know hey it's it's out there and you know time is on our side

So the the answer is, it depends, I think um, you know, we've had a lot of questions and interests around the idea of owning and operating our own gpus and then selling the compute to an off-taker. And in general, we have been, uh, progressing, um, slowly on that front because we want to make sure we're getting the best risk adjusted returns for the megawatts. We've got so obviously, you know, you can produce numbers that are higher, uh, on the revenue side, if you're selling compute, but you're taking on a whole bunch of risks, much larger financing risks, um, you know, GPU life cycle, obsolescence risk, Etc. Uh, I do think a key to making that business area. Attractive would be to lock up a long-term offtake with a highly credible counterparty for the compute.

Um, so we've seen those deals. We're looking at them. Candidly, I think the numbers we signed on our lease with AWS are better. I think we will probably both make more in terms of profits and with much, much, much less risk.

Is, um, literally getting more frenzy, by the, the certainly by the week, if not the day. So, uh, rental rates, um, on leases are going up rapidly. Uh, the level of interest is overwhelming. And so from our perspective, we're spoiled for choice. We we've put ourselves in a very advantageous position. And so, depending on, you know, which deals we think will produce the best risk adjusted returns? Um, that that's how we'll proceed. But I do think the 56 megawatts there. Uh, as well as the 100 megawatts at Stingray, the 70 at Revy.

Will all be taken up. If, if this Market level of Interest continues, we will not have an available megawatt. Um, we have multiple parties interested in all those sites and locking them up as soon as possible.

Okay, thank you very much and, uh, congrats on the AWS announcement.

Thanks great.

Thank you. Our next question comes from Andrew Beal. With that, the floor is yours.

Uh, hi. Can I just ask, what are you thinking about the design of cultures, and what do you think the likely CapEx of that as a greenfield will be per megawatt?

And, and, and, uh, just thinking about our code approval.

Can you talk about what? You know what getting the uh the Google fluid stack and AWS leases does in in helping your approvals at at the other side such as the 3ms and how much difference partnering with AAP makes on that approval front

Uh yeah, thank you very much for the question. So predicting the the budgetary costs at caucus is a, a little bit challenging only because that's going to be. Um, number 1, that's another 1. The ink is still drain on the acquisition. Um, we're beginning to have exploratory conversations uh, with folks that are interested in collocation there. Um, just given the size of it. Um,

You know, but the the what we would do, I guess I'd say in the interim would be will be deploying the capex for the minimum requirements at the site. So fiber substation land uh water sourcing Etc,

You know, I would say I expect our build cost to be in line with what we've done at other sites, if we are building um the same collocation type access which is generally been, you know, call it 9 to 11 million dollars uh, for critical it megawatt. Now that said there could be inflation prices could change Supply chains, Etc. Um, I don't have any reason to believe that the cost would be different per megawatt other than just the passage of time and, and those factors, um, you

You know, so we will be able to give more details in the coming months and quarters. I think that, um, candidly, with an expected availability of power in 2028, given the size of the caucus, we hope to find a partner, you know, before too long, just because that's a tremendous construction timeline and obligation. And so, um, we'll have to get moving on it, but I have no reason to believe the cost would be any different. Um, and then, sorry, remind me of your second question again. I got lost there.

Uh, just about, I mean, you know, signing these leases with Google and AWS. I mean, oh yeah, how it changes us with—sorry, 3 a.m.? Yeah, I think approval, thank you. Uh, yeah, there's huge benefits to these partnerships. I think.

Again, up until a few months ago, I can't tell you how many times we heard, "No one is ever going to sign, uh, at those sites. No one's ever going to sign, you know, with a former Bitcoin miner, at least not a traditional hyperscaler." Um, that discussion is now over. Uh, obviously. And, you know, it probably won't be for us; it will be for others, as well as other deals getting signed across the ecosystem. I think every deal, um, adds incremental credibility. We deserve a lot of credibility. Anyone that got to know the quality of our team, their experience, the things they've built in the past, and just looking at Cipher's own track record. If you took the word "Bitcoin" out and just said, our team has delivered five data centers on time and on budget.

Gets a little bit easier.

Um and we have a lot more credibility on new leases with Regulators with transmission distribution service providers and and truthfully. Um, that that kayak I mentioned in the case of culus which is actually scheduled to go out shortly. Um, you know, that's what matters to kott, right? So having more credibility and having money invested in the space and being a credible counterparty makes a transmission distribution service. Partner want to move forward on your project and spend their own money because they're more likely to get paid and the same on the aircot side. So, so all these things, beget more success. And that's probably the biggest reason for optimism around here, these days.

Right. Thanks.

Thank you. Our next question comes from Michael Donovan with Compass Point. Your line is open.

Thanks for uh, taking the question. Tyler. And congrats on the the progress. Uh, I guess just in terms of supply chain, what are you seeing? Um, in terms of constraints for long lead assets?

Yeah, so I mean listen I think we've we've talked about this over the years that we often work backwards in terms of what the long lead time items look like when we try to come up with a timeline. And as a high-level, generalization that keys off of getting your substation in place. Uh, and and then, um, Downstream from there on the HPC side. It

Matters a little bit in terms of basis, of design for the particular site, which is driven by tenant requirements. But as a broad generalization, uh, if they want, uh, backup genens to, to be there to provide the necessary uptime, those tend to be the next gating item in terms of timeline. I'd say, we have a great track record, our our team, keep in mind like our construction team comes from places like Vantage and waiting Turner and Google, uh, and meta. Uh, and and, um, very experienced in dealing with procuring, all the items, necessary for these data centers, and have relationships up and down the supply chain, you know, to give you a sense. I think back of the envelope in terms of Barber Lake over 85% of the equipment, I think is secured including all long lead time items. So this is a process and in each build spec um, and and will continue to be that way. Generally our risk now and anyone's

Risk. Now signing these deals is of course, delivering the construction, you know, financing and whatever you're building and then delivering the construction on time. Our team has an excellent track record of that. I, I have no reason to expect. We won't have the best performance uh, of anyone in the space in terms of on-time delivery. Uh, the supply chain is kind of a moving, uh, thing. But I think we're really well, positioned. And on the builds, we've got we feel very confident on our timelines, which are aggressive.

That's helpful, Tyler and then I guess my second question is a bit more, esoteric. So I'm here in discussions about sites being linked up to let's say you have a 500 megawatt site here, 500 megawatt site there to the linked them up to deliver 1, gigawatt campus for, for a specific workload. Are you hearing more of these uh, types of discussions? And could we theoretically think of the 3ms coming together for 1, large, 1.5 megawatt, or gigawatt campus?

Um, I think it depends on how the market evolves, so there's no doubt that a lot of the hyperscalers seek sort of redundancy of data centers in the same geographical areas, um, close together.

Uh, I I would say, look, we have a concentration of data center sites. And now a dozen in basically in West Texas, um, I I think that uh,

I, I don't, I don't think of like the 3Ms as being geographically close enough. At least in today's construct to think about linking them. Um, I think it's beneficial that they're not like way far away, but I don't know that that's necessarily how folks would think of them. That phenomenon definitely exists, but I'm not sure I would group our sites in that manner. I think there's a lot of other efficiencies of scale of having, you know, a workforce in that geographical area, etc. that it's great to have things concentrated, but we don't have sites that are necessarily, you know, 10 miles away.

Way or something like that. They they tend to be a little bit further culus, for example, is about um, I think 80 miles uh away from um Barber Lake.

Great. Appreciate that. Tyler, the last one, I promise. Um, so great progress on that at the edge of the Earth. Um, what are we? What should we think about outside of Texas?

Um, so great question. We we are always looking at opportunities. We just, uh, happen to love Texas and seems that we always find the best opportunities. I do think that part of it is that there's, um,

You know, there's a lot of things, business is great in Texas, it's a great place to do business. It also has a history of, um, you know, Risk Takers and entrepreneurs that want to speculate on uh, early stage opportunities. You know, I think it echoes oil and gas somewhat and that there are folks that will speculate on grid interconnections and take a risk on on being able to get something and

Maybe Cipher Secret Sauce, to be honest with you. Now that we've originated 12 sites down there, is that we have a team that has demonstrated Excellence at sourcing, these sites, from what I'll call kind of grid, Wildcats, or or people that are early stage investors in an interconnection opportunity, but are not prepared to develop the site, you know, at a high level that would be ready for an end user like a hyperscaler. Um, I would argue that Cypher is basically the only firm, maybe we have a handful of competitors, but I think we certainly Do It Best in that, we can speak very credibly with that audience, that originates these sites. And at the same time, go have an all day. Technical meeting with our entire

Our construction and operations team with a hyperscaler and impressed them as well. And so, bridging, that gap between, let's call early stage speculation on grid opportunities and then delivering that to the highest quality end user. We have in-house. And honestly, that's why, I believe, we're a tremendous growth stock opportunity. We're not just a basket of assets. The point being, we're not going to stop developing these sites. Now, to answer your question more directly, however, because I was just saying how wonderful Texas is, uh, yes, we are looking at sites particularly in pjm. Uh, historically we've looked at sites all over the world, um, often the economics haven't gotten to a position, we like to be in, we do have a Relentless focus on risk, adjusted returns here. Uh, and so often things um are either too risky, uh, to justify the investment or perhaps the price is too high. They're too mature. There's not enough risk that we feel like we can quantify better than others. So, uh, we are looking at pjm. That's a

Market, we would like to expand into, and stay tuned. I hope that we'll have announcements in the future.

Thank you. Our next question comes from Mike colonies with HC, Wayne Wright and Company. Your line is open.

Good morning, Tyler and team. And congrats on the two big HBC deals here. It's really great to see. I can appreciate the expected delivery timelines you provided with regards to the two contracts. But how should we think about the revenues layering over the course of 2026 and beyond from the two minutes?

Yeah, so the the full delivery um, of the fluid stack, Google deal is expected to be completed at the end of September next year and so rent begins in October.

Of 2016.

Um, Amazon is again getting finalized, but it begins in August of next year.

And then, uh, they'll be stages though. The second stage would be, uh, closer to year, end of next year.

Got it and then, uh, more of a high level question. Tyler, you know interview, what has changed for counterparties? That is accelerated, the pace of deal announcements we've seen in the space for the past month, or so, it feels like the level of urgency from the hyperscalers, Neo clouds, and some others has really picked up and, you know, from where we were just a few months ago, so it would be great to get your thoughts there.

Yeah, I mean it's fair to say that in, in my 25 year, professional career, I I have never witnessed anything closed, uh, to what is going on in the market right now. Um, you asked why I don't know, I listened to the podcast, like, everyone else, and, and here, the CEOs of hyperscalers talking about a shortfall. My sense is that if you are a big Diversified cloud provider, it is easier to predict, uh, Your Capacity needs for the traditional Cloud business out several years. I think the thing that has snuck up on everyone is the just meteoric rise in demand. Uh, for for AI and what is happening now is not only is that demand off the charts.

Discussions are Beyond, you know, every discussion starts with we want megawatts that are available right now. Um, it has now become we want anything in 26 and that's now become we want anything in 27, literally week over week, the tone changes and gets more excitable and in higher demand. And, you know, look lease rates are going up as you would expect in a market like that. Um, I'm very happy with where we put our markers down to have the best possible anchor, tenants in the world for our business. Uh, I think we have now, some pricing, um, strengths on our side, uh, to improve economics and improve deal terms again, you know, the first 15 year, uh, long-term lease directly with a hyperscaler in our space. Uh, not only a hyperscaler, the the biggest hyperscaler demonstrates just the the balance of power coming to those with, uh, the

scarce assets, which we very strategically, uh, arranged over the last few years. So, um, you know, I don't know if that level of frenzy can continue forever but we do feel a little bit like the the tip of the spear here just with what we get insight into. And I I've been saying it for a while now, but the demand is just off the charts and only seems to get more off the charts.

Really interesting color, Tyler. I appreciate your views.

Thanks Mike.

Records. Annuity, your line is open.

Hey guys, uh, good morning, uh, congrats on all this great progress and, uh, welcome on board. Greg and congrats had um on your retirement just a couple here, just maybe this is the most updated thought here, Tyler on um your behind the meter agreement and to you know what what comes next here for Black Pearl given you know that site and its unique uh you know power procurement and uh the expiration of that deal and then overlay on top of that obviously everything going on in the HPC environment and how how does that site evolved from here Joe? Do you mean Odessa you said black pearl with our behind the meter PPA? Is it Odessa? Yeah. Okay. Just wanted to make sure during the correct California. Yeah, absolutely.

Sorry for the for the, before the market call. Uh, so yes, at Odessa. So, um, for those, just as a reminder, we have a PPA at an extraordinarily cheap price for electricity for 207 megawatts at our Odessa Bitcoin mining facility that runs through the end of July 2027. Um, that contract is extremely valuable. Uh, it is.

Way in the money. Uh, we're we're carrying it, um, at a, at a decent value on our balance sheet, uh, and that's because the price is fixed and so cheap for a while. Uh, it's fair to say that in these conversations that our frenzied for more power available. Now we get a lot of interest in saying, hey, would you ever think about converting that site? Um, I think where we're sitting right now is that given our extraordinarily cheap cost of power there mining, Bitcoin is a fantastic business there. Um, HPC over time, could be interesting there, but we're not in any Rush given how strong our contract is and just what that implies for Bitcoin mining economics.

I think it's fair to say it. It could be a really good site. It is co-located with, um, a natural gas, um, generation facility. Uh, that is owned by vistra. Um, and as things evolve again,

In relation to a question, I answered earlier as our credibility grows in the space. I think it's fair to say that more big names across the Spectrum will look to Cipher to provide their data centers. Um, so there is the possibility that something happens there. Uh we would have to coordinate with our power provider of istra and coordinate with a potential tenant. Um but you know we're not in any rush just given that. The economics are locked in at very favorable levels there for another year and 3 quarters.

Sure. Thanks Tyler. And then just really quickly. I may have missed it. But um, this um deal with Microsoft, is it, is it going to be at 1 particular site? Or is it going to be distributed? Um, I just don't know if I saw that in the press release. Thanks.

PC right. But you haven't said, who it, which site? It is yet, I guess. Yeah. Is it the Black Pearl site?

Okay, great. Thank you.

Thank you. And our last question comes from John sodaro with Nom. Your line is open.

Great. Uh, thanks guys. Uh, congrats on the the lease. Um, it's the timeline seems pretty quick on getting that black pearl site for, uh, AWS delivered. Um, just wondering kind of if if I'm missing something or the confidence in being able to to deliver that and then I have a quick follow-up.

Yeah. So confidence is very high again. Um, the the a lease like this is the result of a lot of deep uh, technical meetings with their team. Um, keep in mind at that site, we have built 150 megawatts to an extraordinarily high level of, um, building quality. That is not like our other sites where we had a more limited timeline. And we may have used like a containerized solution that it was always built uh, with a long-term eye towards being convertible. I'm happy to say that again most of that site is immediately reusable on Phase 1 for 150 megawatts. So that's what drives that aggressive timeline on the phase 1 uh and the phase 2. Again, that's just relying on the conversations. We've had talking going through a procurement exercise and uh, scope

Now to supply chain timeline. So I think we can easily meet it. Um but that aggressive timeline is largely based that we're reconfiguring a site that was just built to a very high standard.

Got it, that makes sense. And then my last one, just when you're procuring a site like Caucus. Who are you competing with? Like, obviously, you're signing the major hyperscalers. Are they looking to build out some of their own sites at this point too? Or is it mostly, I guess, maybe other Bitcoin miners you're competing with?

Yeah, so that's a great question. And again, I I sort of alluded to this earlier, but this is, I think the unap underappreciated, um, growth Equity aspect of our company, which is

Doing deals like that requires real local knowledge and understanding, you know, like, um, this is like dealing directly with by analogy a Wildcatter, right? Typically, um, the the hyperscalers are much more used to. First of all, they're big institutions that move. They're not quite as Nimble as we are, but second of all, you know, they're used to um, you know, Jones Lang, LaSalle bringing them a a a pretty to up uh deal deck for a completed data center or site. Um, that is very polished and and ready to present to them. Um, they are not going local to understand the local requirements and dealing with.

Whatever hairy situation there might be on some of these deals. Um, we're

I would argue certainly the best. If not, the only company that has extremely high levels of credibility with that crowd for getting deals done, but also the ability to talk to hyperscalers. So there's this, there's like layers of capital that come to a traditional commodities production business that just don't exist here. So we don't see as much competition from them at that level, and that's really part of our value.

Yep, got it. Understood. Thank you for that. I appreciate it. Congrats again.

Thank you.

Thank you. That's all the time we have for today. I would like to turn the call back over to CEO Tyler Page for closing remarks.

Well, thank you everyone for joining today. I want to call out Edward Farrell. Edward has been my right-hand man since day one at Cypher. We've had many internal thank yous and congratulations on his retirement and transition to senior adviser from Chief Financial Officer, but I wanted to take this opportunity to give a special investor thank you. As one of the largest shareholders of Cypher, I want to say thank you on behalf of all of us for the hard work you've done. I can tell everyone that's a shareholder: we would not have made it here without him. He's been amazing.

And, uh, it's very exciting to get the company to where it is today on the back of his hard work.

It's hard for me to believe that I'm not going to be able to walk around the office and, um, have obscure Godfather references anymore.

Uh, I'm not going to be able to hear from him, or I'm not going to be able to tell him that, you know, the dawn needs to hear bad news right away.

And, uh, I think every time I run into an obstacle that frustrates me, I'm not going to have Ed here to remind me that, you know, Tyler, this is the business we've chosen.

With Greg Mumford, our new CFO, and when we think about all the capital raising and optimization we've got to do going forward, we are in excellent hands. So thank you, in advance of all shareholders, and we wish you a fantastic retirement. Thanks, everyone. We'll talk to you soon.

Thank you for your participation. You may now disconnect. Everyone, have a great day.