Fourth Quarter GAAP Earnings of
Full Year 2023 Revenues of
Increased
"We are delighted to announce our fourth quarter 2023 results, which reflect our first full quarter in which all four of our data centers were operating at full capacity. We delivered a quarter with strong positive net income on both a GAAP and Non-GAAP basis. And while recent FASB accounting changes have been a tailwind for all the miners’ earnings, Cipher was net positive for the quarter even without those accounting changes,” said
“We are particularly excited about our expansion plans for 2024 and 2025. We expect to be at 9.3 EH/s by the end of Q3 2024 via the fully funded expansions at our Bear and Chief data centers and over 16 EH/s in the first half of 2025 via the fully funded phase one build of our Black Pearl data center. We have the potential to grow to 25 EH/s by the end of 2025 with the eventual completion of Black Pearl. We have already seen the results we can achieve with our operational leverage. With the strength of our balance sheet, our expansion plans and proven track record on execution, we expect to be a clear winner through the halving and into the next cycle.”
Finance and Operations Highlights
- Achieved record revenues and net profits on both a GAAP and Non-GAAP basis in the first quarter of operations since inception with fully deployed data centers
- 30 MW expansion at each of Bear and Chief JV data centers, delivering 1.25 EH/s of self-mining capacity, on track for Q2 2024 deployment
- Closed the acquisition of the 300 MW Black Pearl facility and commenced construction work at the site for expected partial energization in Q2 2025
Business Update Call and Webcast
Cipher will host a conference call and webcast today at
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
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 for the year ended
Contacts:
Investor Contact:
Head of Investor Relations at
josh.kane@ciphermining.com
Media Contact:
Dukas Linden Public Relations
CipherMining@DLPR.com
CONSOLIDATED BALANCE SHEETS (in thousands, except for share and per share amounts) | |||||||
ASSETS | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 86,105 | $ | 11,927 | |||
Accounts receivable | 622 | 98 | |||||
Receivables, related party | 245 | 1,102 | |||||
Prepaid expenses and other current assets | 3,670 | 7,254 | |||||
Bitcoin | 32,978 | 6,283 | |||||
Derivative asset | 31,878 | 21,071 | |||||
Total current assets | 155,498 | 47,735 | |||||
Property and equipment, net | 243,815 | 191,188 | |||||
Deposits on equipment | 30,812 | 73,018 | |||||
Intangible assets, net | 8,109 | 596 | |||||
Investment in equity investees | 35,258 | 37,478 | |||||
Derivative asset | 61,713 | 45,631 | |||||
Operating lease right-of-use asset | 7,077 | 5,087 | |||||
Security deposits | 23,855 | 17,730 | |||||
Total assets | $ | 566,137 | $ | 418,463 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities | |||||||
Accounts payable | $ | 4,980 | $ | 14,286 | |||
Accounts payable, related party | 1,554 | 3,083 | |||||
Accrued expenses and other current liabilities | 22,439 | 19,353 | |||||
Finance lease liability, current portion | 3,404 | 2,567 | |||||
Operating lease liability, current portion | 1,166 | 1,030 | |||||
Warrant liability | 250 | 7 | |||||
Total current liabilities | 33,793 | 40,326 | |||||
Asset retirement obligation | 18,394 | 16,682 | |||||
Finance lease liability | 11,128 | 12,229 | |||||
Operating lease liability | 6,280 | 4,494 | |||||
Deferred tax liability | 5,206 | 1,840 | |||||
Total liabilities | 74,801 | 75,571 | |||||
Commitments and contingencies (Note 14) | |||||||
Stockholders’ equity | |||||||
Preferred stock, | - | - | |||||
Common stock, | 296 | 251 | |||||
Additional paid-in capital | 627,822 | 453,854 | |||||
Accumulated deficit | (136,777 | ) | (111,209 | ) | |||
(5 | ) | (4 | ) | ||||
Total stockholders’ equity | 491,336 | 342,892 | |||||
Total liabilities and stockholders’ equity | $ | 566,137 | $ | 418,463 | |||
CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except for share and per share amounts) | |||||||
Years ended | |||||||
2023 | 2022 | ||||||
Revenue - bitcoin mining | $ | 126,842 | $ | 3,037 | |||
Costs and operating expenses (income) | |||||||
Cost of revenue | 50,309 | 748 | |||||
General and administrative | 85,195 | 70,836 | |||||
Depreciation and amortization | 59,093 | 4,378 | |||||
Change in fair value of derivative asset | (26,836 | ) | (73,479 | ) | |||
Power sales | (9,941 | ) | (458 | ) | |||
Equity in losses of equity investees | 2,530 | 36,972 | |||||
Gains on fair value of bitcoin | (11,038 | ) | (6 | ) | |||
Impairment of bitcoin | - | 1,467 | |||||
Other gains | (2,355 | ) | - | ||||
Total costs and operating expenses (income) | 146,957 | 40,458 | |||||
Operating loss | (20,115 | ) | (37,421 | ) | |||
Other income (expense) | |||||||
Interest income | 164 | 215 | |||||
Interest expense | (1,999 | ) | (137 | ) | |||
Change in fair value of warrant liability | (243 | ) | 130 | ||||
Other expense | (17 | ) | - | ||||
Total other (expense) income | (2,095 | ) | 208 | ||||
Loss before taxes | (22,210 | ) | (37,213 | ) | |||
Current income tax expense | (201 | ) | - | ||||
Deferred income tax expense | (3,366 | ) | (1,840 | ) | |||
Total income tax expense | (3,567 | ) | (1,840 | ) | |||
Net loss | $ | (25,777 | ) | $ | (39,053 | ) | |
Net loss per share - basic and diluted | $ | (0.10 | ) | $ | (0.16 | ) | |
Weighted average shares outstanding - basic and diluted | 252,439,461 | 248,227,458 | |||||
CONSOLIDATED STATEMENT OF CASH FLOWS (in thousands) | |||||||
Years ended | |||||||
2023 | 2022 | ||||||
Cash flows from operating activities | |||||||
Net loss | $ | (25,777 | ) | $ | (39,053 | ) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
Depreciation | 58,972 | 4,378 | |||||
Amortization of intangible assets | 121 | - | |||||
Amortization of operating right-of-use asset | 822 | 772 | |||||
Share-based compensation | 38,470 | 41,504 | |||||
Equity in losses of equity investees | 2,530 | 36,972 | |||||
Impairment of bitcoin | - | 1,467 | |||||
Non-cash lease expense | 1,940 | 137 | |||||
Deferred income taxes | 3,366 | 1,840 | |||||
Bitcoin received as payment for services | (126,319 | ) | (2,939 | ) | |||
Change in fair value of derivative asset | (26,836 | ) | (73,479 | ) | |||
Change in fair value of warrant liability | 243 | (130 | ) | ||||
Gains on fair value of bitcoin | (11,038 | ) | (6 | ) | |||
Changes in assets and liabilities: | |||||||
Accounts receivable | (524 | ) | (98 | ) | |||
Receivables, related party | (1,203 | ) | (1,102 | ) | |||
Prepaid expenses and other current assets | 3,531 | 6,433 | |||||
Security deposits | (6,125 | ) | (7,378 | ) | |||
Accounts payable | (9,306 | ) | 892 | ||||
Accounts payable, related party | (1,529 | ) | 1,530 | ||||
Accrued expenses and other current liabilities | 5,311 | 748 | |||||
Lease liabilities | (890 | ) | (203 | ) | |||
Proceeds from power sales | - | 1,721 | |||||
Proceeds from reduction of scheduled power | - | 5,056 | |||||
Proceeds from sale of Bitcoin | - | 23 | |||||
Net cash used in operating activities | (94,241 | ) | (20,915 | ) | |||
Cash flows from investing activities | |||||||
Proceeds from sale of bitcoin | 111,188 | - | |||||
Deposits on equipment | (33,906 | ) | (188,103 | ) | |||
Purchases of property and equipment | (20,480 | ) | (39,219 | ) | |||
Purchases and development of software | (634 | ) | (596 | ) | |||
Capital distributions from equity investees | 3,808 | 54,009 | |||||
Investment in equity investees | (3,545 | ) | - | ||||
Prepayments on financing lease | (3,676 | ) | - | ||||
Net cash provided by (used in) investing activities | 52,755 | (173,909 | ) | ||||
Cash flows from financing activities | |||||||
Proceeds from the issuance of common stock | 135,848 | - | |||||
Offering costs paid for the issuance of common stock | (3,404 | ) | - | ||||
Repurchase of common shares to pay employee withholding taxes | (3,902 | ) | (3,090 | ) | |||
Principal payments on financing lease | (12,878 | ) | - | ||||
Net cash provided by (used in) financing activities | 115,664 | (3,090 | ) | ||||
Net increase (decrease) in cash and cash equivalents | 74,178 | (197,914 | ) | ||||
Cash and cash equivalents, beginning of the period | 11,927 | 209,841 | |||||
Cash and cash equivalents, end of the period | $ | 86,105 | $ | 11,927 |
CONSOLIDATED STATEMENT OF CASH FLOWS - CONTINUED (in thousands) | |||||||
Years ended | |||||||
2023 | 2022 | ||||||
Supplemental disclosure of noncash investing and financing activities | |||||||
Reclassification of deposits on equipment to property and equipment | $ | 74,186 | $ | 105,904 | |||
Right-of-use asset obtained in exchange for finance lease liability | $ | 14,212 | $ | 14,998 | |||
Issuance of common stock in exchange for intangible assets | $ | 7,000 | $ | - | |||
Right-of-use asset obtained in exchange for operating lease liability | $ | 2,812 | $ | - | |||
Reclassification of receivables, related party to investment in equity investees | $ | 2,060 | $ | - | |||
Equity method investment acquired for non-cash consideration | $ | 1,926 | $ | 127,796 | |||
Sales tax accrual on machine purchases | $ | 1,209 | $ | - | |||
Bitcoin received from equity investees | $ | 317 | $ | 4,828 | |||
Common stock cancelled | $ | - | $ | 10,000 | |||
Property and equipment purchases in accounts payable, accounts payable, related party and accrued expenses | $ | - | $ | 13,994 | |||
Right-of-use asset obtained in exchange for operating lease liability | $ | - | $ | 5,859 | |||
Investment in equity investees in accrued expenses | $ | - | $ | 5,316 | |||
Deposits on equipment in accounts payable, accounts payable, related party and accrued expenses | $ | - | $ | 13,403 | |||
Initial estimate of asset retirement obligation and related capitalized costs | $ | - | $ | 16,509 | |||
Reclassification of deferred investment costs to investment in equity investees | $ | - | $ | 174 | |||
Finance lease cost in accrued expenses | $ | - | $ | 339 | |||
Prepaid rent reclassified to operating lease liability | $ | - | $ | 132 | |||
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):
Years ended | ||||||||
2023 | 2022 | |||||||
Reconciliation of Adjusted Earnings: | ||||||||
Net loss | $ | (25,777 | ) | $ | (39,053 | ) | ||
Change in fair value of derivative asset | (26,836 | ) | (73,479 | ) | ||||
Share-based compensation expense | 38,470 | 41,504 | ||||||
Depreciation and amortization | 59,093 | 4,378 | ||||||
Deferred income tax expense | 3,366 | 1,840 | ||||||
Other gains - nonrecurring | (2,355 | ) | - | |||||
Change in fair value of warrant liability | 243 | (130 | ) | |||||
Adjusted earnings | 46,204 | (64,940 | ) |
Source:
2024 GlobeNewswire, Inc., source