Cipher Digital Inc.

Good morning, and thank you for joining us on this conference call to address Cypher Digital's business update for the third quarter of 2026. Joining me on the call today are Tyler Page, Chief Executive Officer, and Greg Mumford, Chief Financial Officer. Please note that our press release and presentation can be found on the investor relations section of the company's website, where this conference call will also be simultaneously webcast. Please also note that this conference call is the property of Cypher Digital, and any taping or other reproduction is expressly prohibited without prior consent. Before we start, I'd like to remind you that the following discussion, as well as our press release and presentation, contain forward-looking statements. These statements include, but are not limited to, Cypress financial outlook, business plans and objectives, and other future events and developments, including statements about the market potential of our business operations, potential competition, and our goals and strategies. Forward-looking statements and risks in this conference call, including responses to your questions, are based on current expectations as of today. and Cypher assumes no obligation to update or revise them whether as a result of new developments or otherwise except as required by law. Additionally, the following discussion may contain non-GAAP financial measures. We may use non-GAAP measures to describe the way in which we manage and operate our business. We reconcile non-GAAP measures to the most directly comparable GAAP measures and we are encouraged to examine those reconciliations which are filed at the end of our earnings release issued earlier this morning. I will now turn the call over to our CEO, Tyler Page.

Tyler? Thanks, Courtney. Good morning, everyone, and thank you for joining us today. I'm Tyler Page, CEO of Cypher Digital, and I'm pleased to welcome you to our third quarter 2026 business update call. The past few months have petted our industry, but I want to be clear from the outset that Cypher was built for this market. Recent regulatory developments and market volatility have generated headlines questioning the industry's trajectory. But the underlying fundamentals, such as demand for compute, are only improving. Today, tenant demand across our pipeline has never been stronger and our strategy, which can be easy to overlook in calmer markets, will continue to prove its value. The decisions we made early on about who we partner with, how we structure our projects, how we navigate a dynamic regulatory environment, and how we engage with our communities were made with exactly these conditions in mind. Against the shifting landscape of more discerning financing markets and rising building costs, we have evolved our approach to match. I will walk through each of these points in more detail today. But first, I want to take a moment at the top to remind everyone who we are and what we do. At its core, SCIFR identifies underappreciated powered land sites and applies capital, expertise, and execution to unlock their value through leasing and development. Put simply, Cypher creates value by turning scarce power into long-term contracted infrastructure. Our model is built on six pillars. We originate sites by identifying and acquiring land and power contracts creatively and cheaply. We lease those sites by signing long-term contracted cash flow agreements with the highest credit quality HPC tenants, with whom we have continued to strengthen our relationships. We finance the deals, which Greg will discuss in more depth, by pioneering capital market solutions that support sustainable growth. We have successfully completed three project-level financings, achieving cheaper funding with each successive project. We then use that capital to develop and deliver mission-critical infrastructure, building campuses designed around dynamic tenant requirements with expert in-house teams across engineering, procurement, and construction. We own and operate the sites while generating recurring, long-duration cash flow. And finally, our financing structures allow us to unlock project equity from stabilized sites. Hold that capital back to the parent and reinvest in future development. Greg has described that flywheel on prior calls, and it is central to how we compound value over time. On our first HPC data centers, we have proven the model. We were among the first in our sector to secure leases, and we worked closely with each tenant to refine their basis of design, which deepened our construction expertise and strengthened our customer relationships. Those efforts have translated into three data center campuses, totaling 700 gross megawatts, all nearing completion and leased to some of the most sophisticated technology companies in the world. Together, they now represent $16.6 billion of contracted revenue over the next two decades, equating to approximately $864 million of projected average annualized NOI. All three projects are in construction phases, with first capacity already delivered at Black Pearl and additional capacity across all three sites expected to come online in phases over the coming months. As our first HPC data centers, We have always focused on partnering with the most creditworthy customers whose strength supports our ability to finance each project. We continue to deepen those relationships as well as engage in conversations with every leading hyperscaler and AI lab regarding our robust pipeline of sites. Second, we remain disciplined about pursuing leases that make sense on a risk-adjusted return basis. This means staying firmly focused on our long-term co-location model. We are not a neocloud. Neocloud providers offer customers access to chips directly. That model can generate a larger headline revenue opportunity but comes with meaningful increase in risk and financing obligations. Revenue visibility is lower, risk exposure is higher, and margins are highly sensitive to changes in the cost of capital and spot pricing for compute. As a long-term co-location provider, we deliver turnkey data center capacity that our tenants fit out themselves. Our capital is focused on the data center, not the chips inside it. In return, we sign long-term contracts with creditworthy counterparties that give us strong revenue visibility and a more limited risk profile. In a market where capital may become harder to come by, that distinction matters. Lenders and investors are placing a premium on predictable, contracted cash flows, and that is exactly what our model is designed to produce. We believe this position Piper to deliver among the most attractive risk-adjusted returns in the sector and we intend to stay focused on that strategy. Now, where have we evolved? The first change is in how we think about pricing new leases. We evaluate every project on a yield on cost basis. The stabilized annual income a site generates relative to the total cost to build it. As the market-wide cost of capital has risen, we are focused on ensuring our returns on new leases keep pace, and we believe that is achievable given sustained demand growth and the scarcity of available power in the coming years. The spread between our yield on cost and our cost of capital is one of the ways we create value for shareholders, and we are focused on protecting that spread. In addition, we are now investing more development capital at the earliest stages of each project. In the beginning of our transition to HPC data center development, both we and our tenants were willing to sign leases before a basis of design was fully defined in order to prioritize speed. Today, we are taking a more deliberate approach, aligning with tenants on design requirements in advance of signing a lease to reduce the risk of significant change orders and schedule impacts as construction progresses. Across our near-term pipeline, we have been working diligently to advance design sets to between 30% and 60% complete ahead of lease execution. This advanced engineering and design work gives us clearer visibility into supply chain and construction costs before we commit to lease economics. We are pairing that work with a selective, proactive approach to procurement, securing critical equipment early to protect our development schedules and insulate CIFR from supply chain availability challenges and cost inflation. In addition, we are evaluating a variety of new structures for future leases, including executing construction reimbursement agreements with tenants ahead of final lease execution. In summary, the fundamentals of our business have not changed. We remain focused on creditworthy tenants, long-term co-location leases, and returns that justify the capital we deploy. What has evolved is the rigor we bring to every new project, from how we price leases to how early we lock in design and procurement. We believe that evolving approach positions Cypher to grow with confidence as we execute on a pipeline of approximately 5.9 gigawatts of near-term opportunities. Now let's turn to our three contracted campuses. Across these leases, we have partnered with leading tenants on lease agreements with a weighted average term of 17.3 years, representing approximately $16.6 billion of contracted revenue and approximately $28.4 billion of contracted revenue, assuming all extension options are exercised. These cash flows are long-term, highly visible, and backed by investment-grade credit. With capacity already online at Black Pearl and initial data hauls coming online at Barber Lake, those projected cash flows are increasingly becoming realized revenue. Let's now zoom out and look at the full scope of what we've built. Across our operating, contracted, and future pipeline developments, including both grid connected as well as on-site generation opportunities, the portfolio now totals approximately 6.8 gigawatts of capacity. A portion of that capacity reflects our already contracted HPC capacity, as well as our legacy Bitcoin mining capacity at Odessa. But the overwhelming majority of it sits in our pipeline, representing substantial growth beyond existing contracts. We are positioned exceptionally well for multiple levers of future growth via continued site acquisition and existing site expansion. as well as the addition of on-site generation for which our sites are particularly well suited. Turning to slide seven, I want to highlight several key developments from the quarter. First and most importantly, we amended and expanded our lease at Barber Lake. The new lease brings an additional 10-year term and total contracted revenue at the site to $9.1 billion. We also established a phased delivery schedule with individual data halls coming online from the fourth quarter of 2026 through the first quarter of 2027. Second, we are pleased to report that we recognize our first HPC lease revenue at Black Pearl in Q3, driven in part by the capacity we delivered ahead of schedule at our tenant's request. Revenue will continue to scale as we deliver additional capacity at Black Pearl, Barber Lake, and Stingray over the coming months. Third, we made meaningful progress on our Texas pipeline, receiving batch zero classifications across several pipeline sites, including a conditional base load classification for one gigawatt at Colkus. We expect final classifications in December after the data center audit is complete. Fourth, we commenced development of lateral pipelines capable of supporting up to 2.5 gigawatts of onsite generation. These pipelines will connect multiple sites to natural gas supplies, which could make power available as early as late 2027. This onsite generation strategy gives us another path to power in addition to the grid and allows us to expand the capacity available at existing sites. Finally, we are proud to support the communities where we operate. Together with Fluidstack and Anthropic, we committed a combined $10 million to repair and upgrade Colorado City's water infrastructure. These funds will go toward municipal infrastructure upgrades identified by the city to improve water availability for residents following last summer's shortages. Turning to slide eight, I'd like to spend some time on our recent lease expansion at Barber Lake, why we pursued it, and why it was a great development for CIPR and our shareholders. First, the numbers. The amendment doubles the base lease from 10 to 20 years and increases contracted revenue to approximately $9.1 billion, adding $5.2 billion of incremental rent. Importantly, Every key project metric at Barber Lake, including IRR, MOEC, and net present value, improved materially, even after accounting for the incremental capital investment it required. As meaningful as those improved economics are, our budding direct relationship with one of the world's leading AI labs is the most valuable part of the transaction. We expect this tenant to be the most significant co-location tenant in the world in the years ahead, and our goal is to develop many data centers for them over time. The changing nature of the lease also demonstrates that AI Lab's long-term commitment to this particular site, which we see as a strong candidate for future expansion. Positioning Barber Lake to grow alongside this tenant is central to our long-term ambitions for the site. Importantly, the amendment also establishes a phased delivery framework aligned with our tenant's compute deployment, and we remain on track against that schedule. Data hauls will be delivered in the fourth quarter of 2026 through the first quarter of 2027, and our tenant is actively deploying compute right now. Before I walk through our portfolio and pipeline, I'd like to hand it over to our CFO, Greg Mumford, to provide more perspective on our expanding opportunity at Garver Lake.

Thanks, Tyler. This transaction was a significant commercial success at Barber Lake. We increased revenue by $5.2 billion, extended the lease term by 10 years directly facing a leading AI lab, and implemented a cost-sharing mechanism resulting in approximately $500 million of incremental revenue over the 20-year term. In exchange for those improved economics, Cypher elected to invest additional capital in the project. There were two principal components to that investment. The first component was change orders. Our tenants' requirements evolved in real time during construction, resulting in approximately $409 million in change orders. Under the lease, those costs would have been the tenant's responsibility and reimbursable to CIFR. As part of the amendment, the tenant will reimburse approximately $50 million, while CIFR agreed to invest the remaining $359 million in exchange for the 10-year lease extension and the significant incremental revenue that comes with it. We viewed that as an attractive exchange of near-term reimbursement for substantially greater long-term asset value. The second component was higher construction costs driven by scope evolution, inflation, and rising labor costs. Under the amendment, we are sharing these costs equally with our tenant and recovering our tenant's share through rentalization at a contracted rate of return over the life of the lease. The right side of the slide shows why we believe this was the right capital allocation decision. When Barbara Lake was originally underwritten, our guidance was $9 to $11 million for IT Megawatt. We ultimately financed the project at $10.4 million for IT Megawatt, supporting an average yield on cost of roughly 15%. Without the amendment, the combination of reimbursed tenant-directed change orders Thank you for joining us. With the transaction, the cost to Cypher increased to approximately $13 million per ITMW, but the additional rent restored the project's average yield on cost to approximately 15%. At the same time, we added 10 years with an improved credit, approximately $5.2 billion of contracted revenue, and improved the project's NPV and MOEC. This was not simply additional capital required to complete the project. It was an incremental investment made in exchange for a materially more valuable contract. We believe the additional long-term value we secured at Barber Lake significantly exceeds the incremental equity we invested to obtain it. With that, I'll turn it back to Tyler to walk through our current portfolio and pipeline.