Pearl

Cipher

<p>Cipher Digital reported a $31.6 million third-quarter net income on November 2, a profit that rests on a $127.2 million noncash warrant gain from Google rather than its shrinking bitcoin mining business.</p>
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  <p><strong>Key takeaways</strong></p>
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   <li>Q3 revenue fell 63% to $26.7 million, with bitcoin mining revenue down 71% to $20.8 million, per the SEC filing.</li>
   <li>The $127.2 million gain is a paper revaluation of warrants Google holds in exchange for guaranteeing part of Fluidstack’s rent.</li>
   <li>Cipher’s business update shows a 22-cent quarterly loss per share once those shares and other dilutive instruments are counted.</li>
   <li>The Barber Lake lease now runs 20 years and carries about $9.1 billion in contracted revenue.</li>
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<p>Cipher filed its <a href="https://www.sec.gov/Archives/edgar/data/1819989/000181998926000047/exh991-q326_earningsxprxvf.htm" rel="noopener noreferrer nofollow">Q3 2026 earnings release with the SEC</a> showing revenue of $26.7 million, down from $71.7 million a year earlier. Bitcoin mining contributed $20.8 million of that, a 71% drop, as the company moved computing capacity away from mining and toward leasing data centers to artificial intelligence companies. Its operating loss widened to $71.9 million from $37.6 million.</p>
<p>The decline is mostly deliberate rather than a market verdict on mining. Cipher stopped mining bitcoin at its Black Pearl facility in Texas in February to prepare it for a new tenant, and that revenue loss shows up in the quarter. Still, the timing compounds the pressure: bitcoin traded in the mid-$70,000s through Q3, thinning margins for miners who stayed in the business. For readers tracking <a href="https://insidebitcoins.com/crypto/bitcoin-mining" rel="noopener noreferrer nofollow">what bitcoin mining involves at today’s prices</a>, the quarter shows the economics tightening even before a miner gives capacity away.</p>
<p>The profit itself is accounting, not cash. It reflects a higher fair value placed on the warrants Cipher issued to Google, which took them as part of a deal under which it guarantees some of the rent owed by Fluidstack, an AI infrastructure company. That adjustment is not money Cipher received, and mark-to-market swings of this size can run the other way in later quarters. Cipher’s <a href="https://www.sec.gov/Archives/edgar/data/0001819989/000181998926000047/cipherdigital_businessup.htm" rel="noopener noreferrer nofollow">business update filed with the SEC</a> gives a different per-share picture: once the shares behind those warrants and its other dilutive instruments are counted, the company records a 22-cent loss for the quarter.</p>
<p>The new business is real but small so far. Cipher earned its first data center revenue in the quarter, collecting $5.9 million after the initial phase of Black Pearl began operations in August. It has also stretched the Barber Lake data center lease to a 20-year term, a site that now carries about $9.1 billion in contracted revenue, the work the pivot is built to fill. Adjusted EBITDA fell to negative $10 million from a positive $40.8 million a year earlier, the closest measure to how the operations actually ran in the quarter.</p>

Bitcoin miner Cipher posts $31.6 million Q3 profit driven by Google warrant gain

Inside Bitcoins

Other articles published on Nov 5, 2026

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