Trefis Team
4 min read
Shares of Cipher Digital (CIFR) fell 12.8% on October 13, 2026, on a day the S&P 500 finished flat. Investors were evaluating a plan to raise $850 million through convertible notes that could eventually become shares. Cipher is taking on this debt to fund data center construction. During the second quarter of 2026, the company still generated its revenue from mining bitcoin, yet it has already secured tenants for three campuses. So how much income have those leases locked in?
Cipher Digital Has Signed Tenants Into The 2030s
Management stated in August that those three signed leases should generate about $793 million of net operating income a year, on average, from October 2026 through September 2036.
The company has expanded its contracted revenue further since August. On September 25, 2026, Cipher extended the lease for its Barber Lake data center in Texas to 20 years. An artificial intelligence lab took the extra ten years, agreeing to occupy the site after the current tenant, Fluidstack, finishes its lease. That additional term represents about $5.2 billion of contracted revenue, the company noted.
At the Black Pearl facility, Cipher delivered the first data center capacity in August. That milestone arrived two months ahead of the original schedule, and rent has already started.
What Has Cipher Digital Not Shown Yet?
Cipher still needs to demonstrate that these leases can make the business profitable. Revenue came in at $25 million during the second quarter of 2026, a decline from $35 million in the first. Management tied this drop to shutting down bitcoin mining at Black Pearl as the company shifts toward data center rent. For the past twelve months, Cipher recorded an operating loss equal to 209.6% of its sales, compared to an 18.5% operating margin for the S&P 500.
Anyone buying the stock today pays for those leases, not for the current sales. Cipher trades at 24.3 times sales, compared to 3.1 times for the S&P 500. The sales behind that multiple still come from a mining business where management plans no further investment.
Funding presents another open question. Cipher carries debt equal to 120.8% of its market value, far higher than the 20.1% for the S&P 500. Management stated in August that the business was well capitalized for its near-term commitments and, based on its current forecast, did not expect to need more equity. The convertible notes proposed in October act as debt for now. If they are eventually exchanged for shares, today’s stockholders would own a smaller slice of the company.
