Cipher Digital Turns $31.6M Profit as Bitcoin Mining Revenue Shrinks and AI Business Starts
Cipher Digital reported a third-quarter net profit of $31.6 million, despite a steep contraction in revenue as the company continued its transition from Bitcoin mining to artificial intelligence infrastructure. Its earnings were largely supported by a one-time, non-cash accounting gain tied to warrants issued to Google.
According to a November 2 filing with the US Securities and Exchange Commission, quarterly revenue fell 63% to $26.7 million from $71.7 million in the same period last year.
Bitcoin mining generated $20.8 million in revenue, a 71% year-over-year decline. The drop reflects Cipher’s decision to redirect computing capacity from cryptocurrency mining toward data-center operations designed to serve AI companies.
The company recorded earnings of 8 cents per share, with net income boosted by a $127 million gain from the fair-value adjustment of its warrants. However, after accounting for the potential dilution from those warrants and other securities, Cipher’s quarterly performance amounted to a loss of 22 cents per share, according to its SEC business update.
Data-Center Operations Deliver First Revenue
Cipher’s move into AI infrastructure began contributing to its financial results during the third quarter. The company generated $5.9 million from its data-center business after the initial phase of its Black Pearl facility in Texas became operational in August.
Bitcoin mining at the facility had been discontinued in February to make room for the new tenant.
The transition has come with higher costs and weaker operating results. Cipher’s operating loss widened to $71.9 million from $37.6 million in the year-ago quarter.
Adjusted EBITDA also shifted into negative territory, recording a $10 million loss compared with a $40.8 million profit a year earlier.
Google Warrants Account for Most of the Profit
A $127.2 million non-cash gain from the revaluation of warrants issued to Google played a central role in Cipher’s reported profitability.
Google agreed to backstop specific lease-payment obligations associated with Fluidstack, an AI infrastructure company. The resulting increase in the warrants’ fair value was recognized as an accounting gain, rather than cash income received by Cipher.
Meanwhile, the company is expanding its long-term data-center commitments. Cipher recently extended its Barber Lake lease to 20 years, lifting the facility’s contracted revenue to approximately $9.1 billion.
The agreement underscores the scale of Cipher’s planned shift toward AI-related infrastructure. While its Bitcoin mining revenue continues to decline, the company is seeking to build a larger, longer-term revenue base through data-center leasing.
