v3.25.3
LEASES
 9 Months Ended
Sep. 30, 2025
Leases [Abstract]  
LEASES LEASES
Barber Lake Facility Lease
On September 24, 2025, the Company’s subsidiary Cipher Barber Lake LLC (“Cipher Barber Lake”) entered into a lease with Fluidstack USA II (“Fluidstack”) which provides for the development of a data center facility on, and lease of the Barber Lake Facility (the “Barber Lake Facility Lease”) for HPC. The Company expects to complete the development and construction of the Barber Lake Facility and deliver the facility to Fluidstack by September 2026. Fluidstack’s obligations to pay rent under the lease begin on the commencement date of the lease and will continue for a 10-year term, and includes two five-year extension options. As part of the Barber Lake Facility Lease, the Company is required to provide certain services for the data center including supplying power, environmental controls, physical security and connectivity products to Fluidstack, and failure to provide these services may result in additional costs under the lease.
Odessa Facility Lease
The Company entered into a series of agreements with affiliates of Luminant, including the Lease Agreement dated June 29, 2021, with amendment and restatement on July 9, 2021 and August 23, 2023 (as amended and restated, the “Luminant Lease Agreement”). The Luminant Lease Agreement leases a plot of land to the Company for the data center, ancillary infrastructure and electrical system (the “Interconnection Electrical Facilities” or “substation”) of the Odessa Facility. The Company entered into the Luminant Lease Agreement and the Luminant Purchase and Sale Agreement to build the infrastructure necessary to support its Odessa Facility operations. The Company determined that the Luminant Lease Agreement and the Luminant Purchase and Sale Agreement should be combined for accounting purposes under ASC 842 (collectively, the “Combined Luminant Lease Agreement”) and that amounts exchanged under the combined contract should be allocated to the various components of the overall transaction based on relative fair values. The Combined Luminant Lease Agreement is classified as a finance lease.
The Combined Luminant Lease Agreement commenced on November 22, 2022 and has an initial term of five years, with renewal provisions that are aligned with the Luminant Power Agreement. Financing for use of the land and substation is provided by Luminant affiliates.
At the end of the lease term for the Interconnection Electrical Facilities, the substation will be sold back to Luminant’s affiliate, Vistra Operations Company, LLC at a price to be determined based upon bids obtained in the secondary market.
Black Pearl Facility Lease
The Company and its wholly-owned subsidiary, Cipher Black Pearl LLC (“Black Pearl”), assumed a lease for a 70 acre plot of land in Winkler County, Texas, for the purpose of constructing a data center, and ancillary infrastructure to construct the Black Pearl Facility. The initial term of the lease is ten years, and includes four consecutive renewal options for ten years each.
Reveille Facility Lease
The Company and its wholly-owned subsidiary, Cipher Reveille LLC (“Reveille”), assumed a lease for a 52 acre plot of land in LaSalle, Texas, for the purpose of constructing a data center, and ancillary infrastructure to construct the Reveille Facility. The initial term of the lease is ten years, and includes two consecutive renewal options for ten years each.
Office and warehouse leases
The Company leases office space for its headquarters in New York, New York, and office space in Charleston, South Carolina, and Denver, Colorado.
In April 2025, the Company entered into a commercial lease for a warehouse in Odessa, Texas
All of the Company's office leases are classified as operating leases.
Additional lease information
Components of the Company’s lease expenses are as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Finance leases:
Amortization of ROU assets (1)
$761 $761 $2,283 $2,283 
Interest on lease liability246 346 817 1,108 
Total finance lease expense1,007 1,107 3,100 3,391 
Operating leases:
Operating lease expense676 542 1,962 1,528 
Total operating lease expense676 542 1,962 1,528 
Total lease expense$1,683 $1,649 $5,062 $4,919 
(1)Amortization of finance lease ROU asset is included within depreciation expense.
The Company did not incur any variable lease costs during any of the periods presented.
Other information related to the Company’s leases is shown below (dollar amounts in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Operating cash flows - operating lease$570 $480 $1,648 $1,320 
Right-of-use asset obtained in exchange for operating lease liabilities
$491 $961 491$4,375 
September 30, 2025December 31, 2024
Weighted-average remaining lease term – finance lease (in years)1.92.7
Weighted-average remaining lease term – operating lease (in years)7.68.0
Weighted-average discount rate – finance lease11.0 %11.0 %
Weighted-average discount rate – operating lease8.0 %8.0 %
Finance lease ROU assets(1)
$5,834 $8,117 
(1)As of September 30, 2025, the Company recorded accumulated amortization of $6.6 million for the finance lease ROU asset. Finance lease ROU assets are recorded within property and equipment, net on the Company’s condensed consolidated balance sheets.
As of September 30, 2025, future minimum lease payments during the next five years are as follows (in thousands):
 
Finance Lease
Operating Lease
Total
Remaining Year Ended December 31, 2025$1,208 $2,612 $3,820 
Year Ended December 31, 20264,834 2,491 7,325 
Year Ended December 31, 20273,223 2,502 5,725 
Year Ended December 31, 2028— 2,284 2,284 
Year Ended December 31, 2029— 1,111 1,111 
Thereafter— 6,668 6,668 
Total lease payments9,265 17,668 26,933 
Less present value discount(945)(5,087)(6,032)
Total$8,320 $12,581 $20,901 
LEASES LEASES
Barber Lake Facility Lease
On September 24, 2025, the Company’s subsidiary Cipher Barber Lake LLC (“Cipher Barber Lake”) entered into a lease with Fluidstack USA II (“Fluidstack”) which provides for the development of a data center facility on, and lease of the Barber Lake Facility (the “Barber Lake Facility Lease”) for HPC. The Company expects to complete the development and construction of the Barber Lake Facility and deliver the facility to Fluidstack by September 2026. Fluidstack’s obligations to pay rent under the lease begin on the commencement date of the lease and will continue for a 10-year term, and includes two five-year extension options. As part of the Barber Lake Facility Lease, the Company is required to provide certain services for the data center including supplying power, environmental controls, physical security and connectivity products to Fluidstack, and failure to provide these services may result in additional costs under the lease.
Odessa Facility Lease
The Company entered into a series of agreements with affiliates of Luminant, including the Lease Agreement dated June 29, 2021, with amendment and restatement on July 9, 2021 and August 23, 2023 (as amended and restated, the “Luminant Lease Agreement”). The Luminant Lease Agreement leases a plot of land to the Company for the data center, ancillary infrastructure and electrical system (the “Interconnection Electrical Facilities” or “substation”) of the Odessa Facility. The Company entered into the Luminant Lease Agreement and the Luminant Purchase and Sale Agreement to build the infrastructure necessary to support its Odessa Facility operations. The Company determined that the Luminant Lease Agreement and the Luminant Purchase and Sale Agreement should be combined for accounting purposes under ASC 842 (collectively, the “Combined Luminant Lease Agreement”) and that amounts exchanged under the combined contract should be allocated to the various components of the overall transaction based on relative fair values. The Combined Luminant Lease Agreement is classified as a finance lease.
The Combined Luminant Lease Agreement commenced on November 22, 2022 and has an initial term of five years, with renewal provisions that are aligned with the Luminant Power Agreement. Financing for use of the land and substation is provided by Luminant affiliates.
At the end of the lease term for the Interconnection Electrical Facilities, the substation will be sold back to Luminant’s affiliate, Vistra Operations Company, LLC at a price to be determined based upon bids obtained in the secondary market.
Black Pearl Facility Lease
The Company and its wholly-owned subsidiary, Cipher Black Pearl LLC (“Black Pearl”), assumed a lease for a 70 acre plot of land in Winkler County, Texas, for the purpose of constructing a data center, and ancillary infrastructure to construct the Black Pearl Facility. The initial term of the lease is ten years, and includes four consecutive renewal options for ten years each.
Reveille Facility Lease
The Company and its wholly-owned subsidiary, Cipher Reveille LLC (“Reveille”), assumed a lease for a 52 acre plot of land in LaSalle, Texas, for the purpose of constructing a data center, and ancillary infrastructure to construct the Reveille Facility. The initial term of the lease is ten years, and includes two consecutive renewal options for ten years each.
Office and warehouse leases
The Company leases office space for its headquarters in New York, New York, and office space in Charleston, South Carolina, and Denver, Colorado.
In April 2025, the Company entered into a commercial lease for a warehouse in Odessa, Texas
All of the Company's office leases are classified as operating leases.
Additional lease information
Components of the Company’s lease expenses are as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Finance leases:
Amortization of ROU assets (1)
$761 $761 $2,283 $2,283 
Interest on lease liability246 346 817 1,108 
Total finance lease expense1,007 1,107 3,100 3,391 
Operating leases:
Operating lease expense676 542 1,962 1,528 
Total operating lease expense676 542 1,962 1,528 
Total lease expense$1,683 $1,649 $5,062 $4,919 
(1)Amortization of finance lease ROU asset is included within depreciation expense.
The Company did not incur any variable lease costs during any of the periods presented.
Other information related to the Company’s leases is shown below (dollar amounts in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Operating cash flows - operating lease$570 $480 $1,648 $1,320 
Right-of-use asset obtained in exchange for operating lease liabilities
$491 $961 491$4,375 
September 30, 2025December 31, 2024
Weighted-average remaining lease term – finance lease (in years)1.92.7
Weighted-average remaining lease term – operating lease (in years)7.68.0
Weighted-average discount rate – finance lease11.0 %11.0 %
Weighted-average discount rate – operating lease8.0 %8.0 %
Finance lease ROU assets(1)
$5,834 $8,117 
(1)As of September 30, 2025, the Company recorded accumulated amortization of $6.6 million for the finance lease ROU asset. Finance lease ROU assets are recorded within property and equipment, net on the Company’s condensed consolidated balance sheets.
As of September 30, 2025, future minimum lease payments during the next five years are as follows (in thousands):
 
Finance Lease
Operating Lease
Total
Remaining Year Ended December 31, 2025$1,208 $2,612 $3,820 
Year Ended December 31, 20264,834 2,491 7,325 
Year Ended December 31, 20273,223 2,502 5,725 
Year Ended December 31, 2028— 2,284 2,284 
Year Ended December 31, 2029— 1,111 1,111 
Thereafter— 6,668 6,668 
Total lease payments9,265 17,668 26,933 
Less present value discount(945)(5,087)(6,032)
Total$8,320 $12,581 $20,901