Cipher Digital (CIFR) Q1 FY26 earnings call: guidance and Q&A

How is pricing trending for incremental leases, and has the company's thinking changed regarding owning compute given the strong leasing environment?

Tyler Page stated that premium pricing continues for near-term available sites due to speed-to-market. He noted that the company is exploring compute ownership at Reveille (70MW) as a 'test kitchen site' due to its scale and evolving credit support for Neoclouds, but generally favors the colocation business for its higher lease rates and attractive risk-adjusted returns.

“I'd say we are looking at an interesting test case at Reveille. Given that Reveille is still a big data center at 70 megawatts, but maybe below the targets of the kind of massive colocation tenants, we are looking at a variety of business models at Reveille, including ones where we may participate in the ownership of the computers.”

asked by Paul Golding · answered by Rodney Page

Can you provide an update on the Odessa PPA, and what is the strategy for behind-the-meter opportunities?

Tyler Page highlighted the very low $0.028/kWh PPA at Odessa, which makes it highly profitable for Bitcoin mining and attracts hyperscaler interest for potential conversion to HPC. He stated there's no rush to change its current use. He also discussed the extraordinary potential for behind-the-meter generation in West Texas using cheap natural gas, acknowledging the engineering, financing, and coordination challenges, calling it a significant 'upside convexity potential' for the stock.

“I think the potential for behind-the-meter on-site generation is extraordinary for us and our sites given where they are. We have access to a tremendous amount of cheap natural gas at our sites in West Texas.”

asked by Joseph Vafi · answered by Rodney Page

Are there expansion options for the new 100MW contract, and what does the business look like by 2030, specifically regarding Bitcoin mining?

Tyler Page clarified the new contract is for 100MW but hinted at potential behind-the-meter expansion. He confirmed that Bitcoin mining will likely be fully exited by the end of 2027, if not sooner, with no further capital expenditure. By 2030, he aspires for Cipher Digital to be operating 4 gigawatts plus of HPC capacity with high-quality, long-term colocation leases.

“I think Bitcoin will not be a part of our story by 2030, like you said, I mean, I would say by 2020 -- end of '27 at the latest, if not sooner.”

asked by Brian Dobson · answered by Rodney Page

What equipment remains outstanding for Black Pearl's Phase I and II, and has the company's view on how far in advance to sign new leases changed?

Tyler Page stated that the remaining outstanding equipment for Black Pearl is commodity-like items, not long lead-time components, with 93% of Phase I and 80% of Phase II equipment already secured. He emphasized that having interconnect approval is a crucial proof point for tenants, driving the timing of lease negotiations, and highlighted the company's ability to deliver quickly as a significant advantage.

“I still think having the interconnect has tended to be a proof point that tenants need to see because I think there's like 1,000 people that are suddenly data center developers and have a site somewhere.”

asked by Michael Donovan · answered by Rodney Page

What is the broader demand for the Ulysses site, and what is the strategy for project-level financing for new contracts?

Tyler Page noted inquiries for Ulysses from both Neoclouds (with potential compute ownership) and hyperscalers for traditional colocation, with the latter being more likely. CFO Greg Mumford expressed confidence in securing similar or better terms for future project-level financing, emphasizing the importance of maintaining flexibility in the capital structure at this stage of growth, and isolating construction risk through nonrecourse financing.

“At our stage of growth, I really want to emphasize the fact that maintaining flexibility in our capital structure is so critical to us right now.”

asked by Benjamin Sommers · answered by Greg Mumford

What are the major hurdles for McLennan, Mikeska, and Colchis to get energized, and what does demand look like for that 2028 power?

Tyler Page explained that the primary challenge is the finalization of the ERCOT batch process, expected next month, which will provide the necessary interconnect approvals. He expressed confidence that these three sites have met all requirements for batch 0. He anticipates significant tenant interest for these large Texas sites (gigawatt scale) once interconnects are firm, as the 1.5-year lead time aligns well with hyperscaler demand forecasts.

“So the challenge here is that ERCOT is going through this batch process where they're doing constant meetings, considering all the final tweaks to how they want to implement it.”

asked by Mike Grondahl · answered by Rodney Page