Cipher Digital recently released its 10-Q report. Cipher Digital Inc. develops and operates industrial-scale data centers in the United States for bitcoin mining and high-performance compute hosting. The company says it is building HPC facilities for hyperscaler tenants, operating one bitcoin mining site, and maintaining a multi-site development pipeline; it was formerly known as Cipher Mining Inc. and changed its name to Cipher Digital Inc. in February 2026.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cipher Digital says its current revenue comes from bitcoin mined at the Odessa and Black Pearl facilities, with bitcoin recognized at fair value as mining power is provided. For the six months ended June 30, 2026, revenue was $59.7 million, down from $92.5 million a year earlier, while cost of revenue rose to $32.8 million from $30.2 million.
The company’s operating expenses increased sharply. Compensation and benefits climbed to $77.4 million for the first half of 2026 from $30.0 million in the prior-year period, driven mainly by stock-based compensation tied to current-year awards. General and administrative expenses increased to $28.2 million from $18.0 million, with the company citing higher legal fees tied to strategic initiatives.
Depreciation and amortization fell to $38.4 million from $87.6 million, reflecting asset write-downs in the mining business and fewer assets in service after mining rig sales. The change in fair value of the power purchase agreement was a $34.1 million loss in the first six months of 2026, compared with an $8.2 million loss in the same period of 2025.
Bitcoin fair value movements also affected results. Cipher Digital recorded unrealized gains of $20.7 million in the first half of 2026, versus an unrealized loss of $3.0 million in the prior-year period, but realized losses on bitcoin sales totaled $47.7 million, compared with realized gains of $8.6 million a year earlier.
Other items further pressured earnings. Interest income increased to $67.5 million from $0.5 million, but interest expense jumped to $125.9 million from $1.9 million. The change in fair value of warrant liability was a $106.9 million expense in the first half of 2026. As a result, loss before taxes widened to $381.1 million from $83.7 million, and net loss increased to $381.8 million from $84.8 million.
For the quarter ended June 30, 2026, revenue was $24.8 million, down from $43.6 million in the prior-year quarter. Cost of revenue was $15.0 million, compared with $15.3 million a year earlier, and was mainly tied to power costs at the Odessa data center, which has a fixed power cost.
Quarterly compensation and benefits rose to $42.4 million from $15.7 million, again mainly because of stock-based compensation. General and administrative expenses increased to $16.5 million from $9.1 million, driven by higher legal fees. Depreciation and amortization fell to $19.4 million from $44.1 million.
In the second quarter, Cipher Digital recorded a $5.9 million loss from the change in fair value of its power purchase agreement, a $16.9 million unrealized gain on bitcoin, and a $23.5 million realized loss on bitcoin sales. The company also reported $35.9 million of interest income, $66.7 million of interest expense, and a $150.5 million loss from the change in fair value of warrant liability. Net loss for the quarter was $267.5 million, compared with $45.8 million in the prior-year quarter.
Cipher Digital’s bitcoin inventory declined to 646 bitcoin at June 30, 2026, from 1,433 bitcoin at the start of the period. During the first half, it received 798 bitcoin from mining activities, sold 1,619 bitcoin, and recorded $20.7 million of unrealized gains and $47.7 million of realized losses on sales. The market has reacted to these announcements by moving the company's shares -12.98% to a price of $21.025. For the full picture, make sure to review Cipher Digital's 10-Q report.
