Cipher Digital Inc. Q3 FY2024 earnings call

• Cipher has rapidly evolved from a Bitcoin miner to an HPC data center developer, having closed five greenfield data center development sites in the last two months. • Odessa became the first Bitcoin mining data center awarded the Uptime Institute's stamp of approval. • It holds 1,508 Bitcoins with an all-in weighted average power price of $0.027 per kilowatt hour. • The company is developing sites like Black Pearl, scheduled to energize in Q2 2025 with 250 megawatts of air-cooled and 50 megawatts of liquid-cooled Bitcoin mining, and Barber Lake with an approved 300-megawatt capacity and an existing energized substation. • Its team, with expertise from hyperscalers, is innovating in both HPC and Bitcoin mining spaces.

Cipher Mining's business has evolved from a Bitcoin miner to an HPC data center developer. As of quarter end, it operated 9.3 exahash per second of self-mining capacity. Odessa, a key facility, represented approximately 83% of Bitcoin production in September, with 7.1 exahash per second generated using 207 megawatts, and is expected to reach 11.3 exahash per second post-rig upgrade. The joint venture data centers of Alborz, Bear, and Chief had a total power capacity of 120 megawatts and generated approximately 4.4 exahash per second, with Cipher owning 49% and its portion contributing roughly 17% of overall Bitcoin production. By the end of 2024, self-mining capacity is projected to grow to 13.5 exahash per second with a fleet-wide efficiency of 18.9 joules per terahash.

• By the end of 2024, self-mining capacity is expected to grow to 13.5 exahash per second. • Black Pearl is scheduled to energize in Q2 2025. • Barber Lake site has an approved 300-megawatt capacity with an existing substation. • The company expects to sign long-term leases with high-quality HPC tenants to generate substantial returns for shareholders.

• Market fluctuations in Bitcoin price and hash rate. • Potential delays in HPC project timelines. • Changes in power pricing and availability. • Competition in the data center and Bitcoin mining industries.

Q: How are you allocating capital between Bitcoin mining projects and HPC projects?

A: Focused on what drives greatest shareholder returns. Both are good verticals but different. HPC has reliable cash flows from long-term leases, Bitcoin mining is cyclical. Cipher is a data center development company with a hedge as sites can be used for Bitcoin mining if HPC doesn't materialize.

Q: Are you getting past initial stages with HPC customers?

A: Have had many discussions, are advanced, with clients wanting long-term leases, paying percentages of total cost to build, depending on credit quality.

Q: Any change to Black Pearl's thinking on HPC optionality?

A: Flexible, driven by best returns for the company, will entertain offers for HPC if better than Bitcoin mining.

Q: Thoughts on capacity demand from hyperscalers and securing greenfield sites in Texas?

A: Hyperscalers focused on near-term 2025 capacity, securing greenfield sites is getting more challenging but Cipher has expertise and has found sticky situations, with 3Ms sites in earlier development stages.