Cipher Mining (CIFR) - 2023 Q4 - Annual Results

Cipher Mining 2023 Fourth Quarter and Full Year Business Update Business Highlights and Expansion Plans The company achieved record Q4 2023 results and is aggressively expanding its hash rate capacity Key Financial Metrics | Metric | Q4 2023 | Full Year 2023 | | :--- | :--- | :--- | | GAAP Earnings | $10.6 million | - | | Non-GAAP Earnings | $27.8 million | - | | Revenues | - | $126.8 million | - Q4 2023 was the company's first full quarter with all four data centers operating at full capacity, leading to record revenues and net profits[1][2] - Cipher is expanding its hash rate with a clear growth trajectory[7][8]: - Q1 2024: Increased to 7.4 EH/s - Q3 2024: On track to reach 9.3 EH/s via expansions at Bear and Chief data centers - H1 2025: Expected to exceed 16 EH/s with the first phase of the Black Pearl data center - End of 2025: Potential to grow to 25 EH/s upon full completion of Black Pearl - The company acquired the 300 MW Black Pearl facility and has commenced construction, with partial energization expected in Q2 2025[2] Financial Statements Financials show significant operational scaling with surging revenue and asset growth in 2023 Consolidated Balance Sheets The balance sheet strengthened with total assets growing to $566.1 million, driven by cash and equipment Balance Sheet Summary | Balance Sheet Item (in thousands) | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $86,105 | $11,927 | | Bitcoin | $32,978 | $6,283 | | Total current assets | $155,498 | $47,735 | | Property and equipment, net | $243,815 | $191,188 | | Total assets | $566,137 | $418,463 | | Total liabilities | $74,801 | $75,571 | | Total stockholders' equity | $491,336 | $342,892 | Consolidated Statements of Operations Bitcoin mining revenue surged to $126.8 million in 2023, leading to a reduced net loss Operations Summary | Income Statement Item (in thousands) | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | | :--- | :--- | :--- | | Revenue - bitcoin mining | $126,842 | $3,037 | | Cost of revenue | $50,309 | $748 | | Operating loss | ($20,115) | ($37,421) | | Net loss | ($25,777) | ($39,053) | | Net loss per share | ($0.10) | ($0.16) | Consolidated Statement of Cash Flows Strong financing activities drove a net cash increase of $74.2 million, boosting year-end cash reserves Cash Flow Summary | Cash Flow Activity (in thousands) | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($94,241) | ($20,915) | | Net cash provided by (used in) investing activities | $52,755 | ($173,909) | | Net cash provided by (used in) financing activities | $115,664 | ($3,090) | | Net increase (decrease) in cash | $74,178 | ($197,914) | | Cash and cash equivalents, end of period | $86,105 | $11,927 | Non-GAAP Financial Measures Non-GAAP Adjusted Earnings reached $46.2 million in 2023, reversing a significant loss from 2022 Reconciliation to Adjusted Earnings | Reconciliation to Adjusted Earnings (in thousands) | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | | :--- | :--- | :--- | | Net loss (GAAP) | ($25,777) | ($39,053) | | Change in fair value of derivative asset | ($26,836) | ($73,479) | | Share-based compensation expense | $38,470 | $41,504 | | Depreciation and amortization | $59,093 | $4,378 | | Deferred income tax expense | $3,366 | $1,840 | | Other gains - nonrecurring | ($2,355) | - | | Change in fair value of warrant liability | $243 | ($130) | | Adjusted earnings (Non-GAAP) | $46,204 | ($64,940) | - The reconciliation from GAAP Net Loss to Non-GAAP Adjusted Earnings primarily involves adjusting for significant non-cash expenses and income, including depreciation, share-based compensation, and fair value changes of financial instruments[24]