Cipher Mining (US:CIFR)2023-03-14 17:50Financial Data and Key Metrics Changes - For the year ended December 31, 2022, the company reported a net loss of $39.1 million, resulting in a net loss of $0.16 per share, with revenue of $3 million generated entirely from Bitcoin mining operations [51][35] - The change in fair value of the Odessa power agreement resulted in a gain of $73.5 million, offset by equity losses totaling $37 million [51][49] - General and administrative expenses for the year were $70.8 million, including stock-based compensation of $41.5 million [52] Business Line Data and Key Metrics Changes - The company ended February 2023 with the ability to mine over 15.5 Bitcoin per day and held 465 Bitcoin in reserve [7] - As of the end of February 2023, Cipher reported 5.2 exahash per second of self-mining operations across all sites, with potential expansion to 8.2 exahash per second by year-end 2023 [17][33] - The Odessa data center began operations in November 2022, mining 180 Bitcoin from November 22, 2022, to December 31, 2022 [35] Market Data and Key Metrics Changes - The company noted that energy prices have softened recently, but there are still more mining rigs looking for homes than available sites with good mining cost economics [11] - The average electricity cost per Bitcoin produced at the Alborz site was approximately $5,143, while at Bear and Chief, it was about $6,293 [21][40] Company Strategy and Development Direction - Cipher Mining aims to control electricity costs and capital expenditures to maintain low production costs, positioning itself as a low-cost producer in the Bitcoin mining industry [10] - The company is focused on organic growth opportunities within its existing portfolio, particularly at the Odessa site, while remaining open to low-risk cyclical opportunities [24][30] - The company plans to manage growth prudently amid challenging market conditions and financing environments [33][48] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term potential for Bitcoin, despite current market challenges, and emphasized the importance of maintaining a strong liquidity profile [12][61] - The management team highlighted that they have no debt obligations and are funding operations through current Bitcoin production, which positions them well for future growth [49][50] Other Important Information - The company has access to a $250 million at-the-market equity shelf but has yet to utilize it [47] - The company has a strong focus on proactive counterparty risk management, maintaining accounts with major banks [12] Q&A Session Summary Question: How is the company thinking about CapEx spend needed to expand at Bear and Chief? - Management indicated that financing options could include debt financing, equity sales, or operational cash flow, depending on market conditions [57] Question: What prices is the company currently seeing for rigs? - Management noted that rig prices are constantly shifting, and they are prepared to purchase rigs at potentially below manufacturing costs, but will wait until infrastructure is in place [69] Question: How does the company evaluate the use of the $250 million shelf offering? - Management stated that they would consider using it for accretive opportunities, particularly if they find favorable rig prices [72] Question: What is the company's strategy regarding Bitcoin inventory? - Management aims to build Bitcoin inventory slowly over time while liquidating some to cover operational expenses [137] Question: How does the company view the potential excise tax on electricity for digital mining? - Management expressed skepticism about the proposal's likelihood of passing and noted that it could have significant implications for the industry [140]