Cipher Digital reports US$27M revenue as first HPC lease income begins

HPC lease revenue recognition has begun at one data-centre project, while another project's amended lease now spans 20 years. Cipher Digital Inc. NASDAQCIFR, an industrial-scale data-centre developer and operator, reported US$27 million of third-quarter revenue on Monday.

Cipher recognized its first high-performance computing lease revenue after rent commenced at Black Pearl. The US$27 million is company-wide revenue, rather than a measure of quarterly HPC rent, and the company reported an adjusted EBITDA loss of approximately US$10 million for the third quarter of 2026.

Before the results, Cipher shares NASDAQCIFR closed at US$7.29 on Nasdaq at 4 p.m. EDT on Oct. 30. That closing price precedes the Nov. 2 announcement and provides the market baseline for the first report with HPC lease income.

The company also confirmed that Barber Lake's contracted revenue now totals approximately US$9.1 billion over 20 years under a previously announced amendment. Multiple data halls at Black Pearl and Barber Lake are scheduled to come online through the end of 2026, making delivery the immediate test of that contracted income.

Barber Lake Rent Spans Two Decades

In its Nov. 2 update, Cipher said the Barber Lake amendment adds a second 10-year term directly with a tenant Cipher describes as a leading AI lab. It adds approximately US$5.2 billion of incremental rent to the site's contracted revenue, while establishing a phased delivery schedule aligned with the tenant's computing deployment.

Those contract totals cover future lease periods, while the US$27 million revenue figure covers the third quarter of 2026. Treating the two as interchangeable would obscure how much construction and phased delivery still stands between a signed lease and recognized income.

Cipher said Barber Lake construction remains on track against the amended milestones. At Black Pearl, equipment installation and energization continue across individual data halls, so the start of rent does not mean every hall has completed its ramp-up.

"We are adding new capacity to our pipeline, investing earlier in every project and advancing design work before committing to new leases, so we are well positioned for our next phase of growth," Cipher chief executive Tyler Page said in the release.

Convertible Funding Supports Barber Lake

During the third quarter of 2026, Cipher completed an US$850 million offering of zero-coupon convertible senior notes due in 2032. The company said the offering funds additional equity investment into Barber Lake in connection with the expanded lease.

Associated capped-call transactions raise the effective conversion price to US$28.35 per share, according to Cipher's Nov. 2 release. That figure describes the financing's capped-call protection and is separate from the pre-results share price.

Cipher also converted approximately US$165.9 million of its 1.750 per cent convertible notes due in 2030 into equity, retiring more than 90 per cent of that issue. The transaction reduces the outstanding older notes through equity issuance, while the new financing carries a later maturity.

The revenue result was below the US$40.63 million consensus estimate published by Zacks Investment Research on Oct. 29. Zacks described the business as shifting from bitcoin mining toward leased HPC facilities, making the company-wide revenue total different from the income of its new leasing business.

IREN Limited NASDAQIREN, an AI cloud provider that operates data centres and computing infrastructure, offers another example of funding tied to operating assets. Its Oct. 28 announcement confirmed US$363 million of equipment refinancing, backed principally by equipment already deployed and generating revenue.

The equipment refinancing covered earlier by Mugglehead returned capital to IREN from deployed servers and networking systems. IREN's Oct. 28 release says the facility is supported by multi-year customer contracts; Cipher's Nov. 2 results describe financing for additional project equity.

Read more: IREN Limited completes US$363M refinancing for operating AI equipment

Power Classifications Remain Conditional

Cipher's Nov. 2 update puts its development pipeline at approximately 5.9 gigawatts. Within that pipeline, Colchis received conditional base load classification for 1 gigawatt through the Electric Reliability Council of Texas's Batch Zero process.

Another 1.6 gigawatts received conditional studied load classifications with Provisional Controllable Load Resource designations. These are conditional classifications, so the pipeline total does not establish an equivalent amount of operating, rent-producing capacity.

The company has begun developing lateral natural-gas pipelines to support up to 2.5 gigawatts of potential on-site generation. It also acquired Horizon, a 70-megawatt Texas site expected to energize in 2029, while identifying 270 megawatts available in 2027 with tenant discussions and design work advancing.

Cipher's next scheduled examination comes at its Nov. 2 business-update call at 8 a.m. EST. The construction milestone after that is Stingray's shell, which the company expects to complete in the fourth quarter of 2026.