Cipher Digital booked $5.85 million of first AI rent against $6.7 billion of debt

Cipher Digital's▼−20.87% — Cipher Digital, down 20.87 percent today first quarter as a landlord is on the record, and it is thin: revenue of $27 million, adjusted EBITDA of negative $10 million, and the first $5.85 million of high-performance-computing rent, booked after tenants began paying at the Black Pearl campus ¹². Behind those small numbers sit two large ones. Roughly $16.6 billion of contracted rent sits in signed leases averaging 17.3 years, which management pegs at about $864 million of average annualized net operating income ².

And roughly $6.7 billion of debt stands in front of a market capitalization of about $3.5 billion ². The shares, down about 68 percent↗ from a late-July close near $22.66 to $6.86 on November 2, sit under both numbers ²³.

The mining era is winding down on the income statement

The company used to be Cipher Mining, a bitcoin miner, and the filings show the pivot in real time. Mining-era revenue peaked at $71.7 million in the third quarter of 2025 and fell to $24.8 million by the second quarter of 2026, before the landlord quarter lifted the total back to $27 million, with $5.85 million of it, the first HPC rent ever booked, coming from leases rather than machines ¹⁶. The replacement business leases campuses to AI labs and hyperscalers for up to two decades at a time.

The contract got bigger, and so did the bill

The promise grew this quarter. An amended Barber Lake lease↗ adds a second ten-year term directly with a leading AI lab, lifting contracted revenue at that site to about $9.1 billion, including $5.2 billion of incremental rent, and restoring projected yield on cost to about 15 percent from about 13 percent ¹³. But the same tenant's design changes pushed Barber Lake's expected cost to about $13 million per critical IT megawatt from about $10.4 million, with $409 million of change orders of which the tenant reimburses only about $50 million ²³.

More debt now stands in front of the equity

Total borrowings sit near $6.7 billion, including about $4.5 billion of non-recourse project notes and $2.2 billion of parent-level convertibles, against that $3.5 billion market capitalization; adding the debt takes enterprise value to roughly $8.4 billion, the number the leases must justify ².

In October Cipher sold $850 million of 0.000% convertible notes due 2032↗, priced to convert at $15.31 with capped calls lifting the effective conversion price to $28.35, and swapped $165.9 million of 1.750% notes into about 40.7 million shares, adding more than 10 percent to the share count ¹²³. The new money pays no interest unless the stock more than doubles from here.

The sell-side analysts cut targets and kept the buys

On November 3 the banks covering Cipher, sell-side analysts at JPMorgan, Wells Fargo▲+1.77% — Wells Fargo, up 1.77 percent today, Needham, Cantor Fitzgerald and Rosenblatt, cut their price targets while keeping buy ratings↗: JPMorgan▲+4.04% — JPMorgan, up 4.04 percent today to $18 from $22, Wells Fargo to $15 from $25, Rosenblatt and Cantor to $19 and $15 ³⁴⁵. Bernstein, another covering firm, cut to $23 from $32 after raising its cost of capital to 15 percent, the discount rate it applies to future cash flows ³.

Its own arithmetic shows why the disagreement is narrow: the contracted campuses imply a cap rate, the annual income a property yields on its total cost, of about 11 percent, against 5 to 7 percent for established data-center REITs ³.

Barber Lake and Black Pearl deliveries in the first quarter of 2027 are the dated test of whether that $864 million a year arrives as cash or stays as paper ²³. Until then the record offers a choice between two true numbers: a $3.5 billion market capitalization owning $16.6 billion of contracts, and an $8.4 billion enterprise value that owes the debt before shareholders see any of it ².