Trefis Team
4 min read
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Cipher Digital (CIFR) owed $5.6 billion at the end of June 2026, climbing from $189 million a year earlier. The chance of a 50% drop from current levels rests in part on how well the company carries that debt. Such a decline would not be new. The stock has shed at least 50% within each of the last five calendar years. So why has Cipher borrowed this much, and what does the debt cost?
Cipher Digital Is Borrowing To Build Data Centers
Management noted on the August 4, 2026 call that Cipher funds its data center campuses project by project. During the call, executives said the company priced an $810 million bond that fully funds its Stingray campus through substantial completion. Construction in progress expanded to $1.68 billion by the end of June, which management said reflected building activity at Barber Lake, Black Pearl and Stingray. The borrowing continued past June. On October 13, Cipher announced plans to sell $850.0 million of convertible notes due 2032. It priced the offering the next day, with the sale set to settle on October 16.
Cipher owes more than its shares are worth. Its debt stands at 153.9% of its stock market value, compared with 19.4% for the S&P 500. Revenue dropped to $25 million in fiscal Q2 2026, down from $35 million the previous quarter. Management tied the decline to halting bitcoin mining at Black Pearl as Cipher transitions to contracted data center revenue. Interest expense for the quarter reached $67 million, more than double that revenue.
How Much Rent Has Cipher Digital Locked In?
In August, management expected Cipher’s three signed leases to produce about $793 million a year of net operating income on average from October 2026 through September 2036. Rent payments have already begun at Black Pearl, where the company delivered its first capacity in August, two months ahead of schedule. On the August call, management anticipated rent from the initial phase of Barber Lake would begin in October. The company extended the Barber Lake lease to 20 years in September, which it said pushes the associated revenue to over $9 billion. The company extended the Barber Lake lease to 20 years in September, which it said pushes the associated revenue to over $9 billion. A Zacks report said the amendment also revised the site’s delivery phases and cost-sharing terms.
Cipher has money set aside until more of that rent materializes. At the end of June, the company held $832 million of unrestricted cash, alongside about $3.2 billion more reserved for construction. Before announcing the October convertible note plan, management said in August that on current forecasts it did not expect to need additional equity.
