Cipher Books First HPC Lease Revenue at Black Pearl

The Tip Desk · November 2, 2026 · 4 min read

Third-quarter revenue was $27 million, including $5.9 million of HPC leasing after rent commenced at Black Pearl.

Cipher Digital Inc. (CIFR), a developer, owner, and operator of industrial-scale data centers, recognized its first high-performance computing lease revenue in the third quarter of 2026 after rent commenced at Black Pearl, a milestone the company said marked a step in its transition to an HPC development platform.

Total revenue was $27 million, or $26.7 million as reported in the income statement, after $25 million in the second quarter and $35 million in the first quarter. Bitcoin mining revenue was $20.8 million. HPC leasing contributed $5.9 million, compared with zero a year earlier. Adjusted EBITDA was negative $10.0 million, improving from negative $30 million in the second quarter.

GAAP results swung to net income of $31.6 million available for common stockholders, or $0.08 a share on a basic basis, from a net loss of $3.3 million, or $(0.01) a share, in the year-ago quarter. The company recorded a $127.2 million non-cash gain on the fair value of its warrant liability. Operating loss widened to $71.9 million from $37.6 million a year earlier, with compensation and benefits of $38.6 million and general and administrative expense of $26.4 million. Interest expense was $59.0 million, up from $1.3 million a year earlier; interest income was $32.7 million.

Black Pearl first delivered capacity in August, two months ahead of the original schedule, with 18 MW of critical IT capacity delivered to the tenant to date. Remaining Phase I data halls were in MEP fit-out, and Phase II foundations and building steel were completed. The company said multiple data halls across Black Pearl and Barber Lake are scheduled to come online through year-end.

The larger commercial move was an amendment to the Barber Lake lease that added a second 10-year term directly with a leading AI lab, extending the site to a 20-year term and increasing total contracted revenue there to approximately $9.1 billion, adding about $5.2 billion of incremental rent. The company said it elected to invest additional capital rather than seek change-order reimbursement, and that a tenant cost-sharing framework provides for partial rentalization, including a return on invested capital. Construction remained on track against an amended phased delivery schedule aligned with the tenant’s compute deployment.

The contracted portfolio now totals 700 MW of gross HPC capacity with a 17.3-year weighted average lease term and $16.6 billion of contracted revenue. Barber Lake is 300 MW with $9.1 billion of contracted revenue. Black Pearl is 300 MW with $5.5 billion on the base lease and $14.1 billion including extensions. Stingray is 100 MW with $2.0 billion on the base lease and $5.2 billion including extensions.

Cipher received ERCOT Batch Zero conditional classifications, including a conditional base load classification for 1 GW at Colchis and conditional studied-load classifications with PCLR designations for an additional 1.6 GW. Final Batch Zero classifications were expected in December after a data center audit. The company also commenced development of lateral natural-gas pipelines capable of supporting up to 2.5 GW of on-site generation, targeting gas availability in 2027, and acquired Horizon, a 70 MW Texas site expected to energize in 2029. The development pipeline totals approximately 5.9 GW.

Property and equipment, net, stood at $3.90 billion at September 30, 2026, versus $633.4 million at year-end 2025, reflecting construction of the HPC campuses. Unrestricted cash and cash equivalents were $724 million as of September 30, pro forma for an $850 million offering of 0.000% convertible senior notes due 2032 that closed after quarter-end and funded additional equity into Barber Lake. The company equitized approximately $165.9 million of the 1.750% convertible notes due 2030, retiring more than 90% of those notes.

Odessa bitcoin mining produced about 296 BTC in the quarter at about 11.6 EH/s, 207 MW of capacity, and about 2.8 cents per kilowatt-hour of power cost. The company said it is in active discussions on HPC monetization at the site. Stingray steel erection was progressing, with shell construction expected to be completed in the fourth quarter.