Cipher Mining (CIFR) 4th Annual Needham Virtual Crypto Conference summary

Strategic growth and hash rate expansion

• Current hash rate is 9.1 exahash, with an upgrade to 13.5 exahash by year-end 2024, improving efficiency to 18.6 joules per terahash.

• A new 300-megawatt data center, Black Pearl, is under construction and expected to bring total hash rate to 35 exahash by end of 2025, with efficiency near 15 joules per terahash.

• Most equipment for expansion is under contract or delivered, with construction risks managed and regulatory approvals in place.

• Execution risk is minimized by a repeatable process and experienced team, with a track record of on-time delivery.

• Industry-wide, access to capital and operational know-how have improved, increasing the likelihood of meeting hash rate targets.

High-performance computing (HPC) strategy

• Deliberate approach to HPC, focusing on originating large-scale sites and building powered shells for hyperscaler tenants rather than operating GPU compute services.

• Recently acquired a 300-megawatt site in West Texas, with substation and approvals in place, targeting long-term leases with hyperscalers.

• Flexibility to use new sites for either HPC or Bitcoin mining, depending on market demand and financing.

• Early-stage discussions with several hyperscalers, with high demand for sites that can deliver three nines of uptime quickly.

• Typical lease yields for hyperscalers are 10%-11% unlevered, with capital-intensive builds financed through debt.

Power strategy and cost management

• Largest site has a fixed power contract at $0.027/kWh until July 2027, achieved by trading a 5% curtailment option to the provider.

• Front-of-the-meter sites use automated systems to optimize power costs, targeting average prices below $0.03/kWh by curtailing during peak hours.

• Participation in demand response and ancillary services programs further reduces net power costs.

• Investment in trading and hedging technology enables dynamic power price management and cost advantages over competitors.