Cipher Mining Reports $31M Profit as It Accelerates Shift Toward AI

Cipher Digital, a former Bitcoin miner now developing data centers, recorded a $31.6 million profit in the third quarter despite a sharp decline in revenue. The reported earnings were supported by a $127 million accounting gain associated with warrants issued to Google.

The company’s revenue dropped 63% year over year to $26.7 million in the three months ended September, compared with $71.7 million in the same period last year, according to its November 2 SEC filing. Bitcoin mining generated $20.8 million, representing a 71% decline as Cipher shifted computing resources away from mining and toward data-center infrastructure for artificial intelligence customers.

Cipher posted net income of $31.6 million, equivalent to 8 cents per share. However, the figure included a $127 million non-cash gain resulting from an increase in the fair value of its warrants.

When the potential impact of those warrants and the company’s other dilutive securities is included, the quarterly result becomes a loss of 22 cents per share, according to its business update filed with the SEC.

The company also recorded its first revenue from data-center operations during the quarter. It generated $5.9 million after the initial phase of its Black Pearl facility in Texas entered service in August.

Cipher had halted Bitcoin mining at the site in February as it prepared the facility for its new tenant.

The transition has also increased operating costs. Cipher reported an operating loss of $71.9 million, nearly double the $37.6 million loss recorded a year earlier. Adjusted EBITDA, which excludes certain accounting expenses and gains, fell to a loss of $10 million from a profit of $40.8 million in the prior-year quarter.

Much of the reported net income came from a $127.2 million non-cash gain linked to the revaluation of warrants issued to Google. Google agreed to support certain lease-payment obligations involving Fluidstack, an AI infrastructure company. The accounting gain increased Cipher’s reported earnings but did not represent cash received by the company.

Despite the near-term financial pressure, Cipher is positioning itself for a larger role in AI infrastructure. The company recently extended its data-center lease at Barber Lake to 20 years, lifting the site’s contracted revenue to approximately $9.1 billion.