Cipher Digital booked a $31.6 million Q3 profit on a $127.2 million noncash Google warrant gain as revenue fell 63% and its AI data center pivot began.
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.
Key takeaways
- Q3 revenue fell 63% to $26.7 million, with bitcoin mining revenue down 71% to $20.8 million, per the SEC filing.
- The $127.2 million gain is a paper revaluation of warrants Google holds in exchange for guaranteeing part of Fluidstack’s rent.
- Cipher’s business update shows a 22-cent quarterly loss per share once those shares and other dilutive instruments are counted.
- The Barber Lake lease now runs 20 years and carries about $9.1 billion in contracted revenue.
Cipher filed its Q3 2026 earnings release with the SEC 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.
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 what bitcoin mining involves at today’s prices, the quarter shows the economics tightening even before a miner gives capacity away.
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 business update filed with the SEC 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.
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.
