Cipher Digital Inc.CIFR
Cipher Digital Inc. Leases Disclosure
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 Inc. (“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 deliver the facility to Fluidstack by September 2026. Fluidstack’s obligations to pay rent under the lease begin on the commencement dates of the lease and will continue for a 10-year term, as well as for the two five-year extension options, as applicable. 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 an approximately 75 acre plot of land in Winkler County, Texas in December 2023, 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 up to 52 acres of land in LaSalle, Texas, in October 2024 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):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Finance leases: | |||||||||||||||||
Amortization of ROU assets (1) | $ | 3,044 | $ | 3,043 | $ | 3,110 | |||||||||||
| Interest on lease liability | 1,036 | 1,430 | 1,940 | ||||||||||||||
| Total finance lease expense | 4,080 | 4,473 | 5,050 | ||||||||||||||
| Operating leases: | |||||||||||||||||
| Operating lease expense | 2,642 | 2,167 | 1,955 | ||||||||||||||
| Total operating lease expense | 2,642 | 2,167 | 1,955 | ||||||||||||||
| Total lease expense | $ | 6,722 | $ | 6,640 | $ | 7,005 | |||||||||||
(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):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Operating cash flows - operating lease | $ | 4,079 | $ | 2,138 | $ | 1,655 | |||||||||||
Right-of-use asset obtained in exchange for operating lease liabilities | 491 | $ | 6,733 | $ | 2,812 | ||||||||||||
| December 31, 2025 | December 31, 2024 | ||||||||||
| Weighted-average remaining lease term – finance lease (in years) | 1.7 | 2.7 | |||||||||
| Weighted-average remaining lease term – operating lease (in years) | 7.3 | 8.0 | |||||||||
| Weighted-average discount rate – finance lease | 11.0 | % | 11.0 | % | |||||||
| Weighted-average discount rate – operating lease | 8.0 | % | 8.0 | % | |||||||
| $ | 5,073 | $ | 8,117 | ||||||||
(1)As of December 31, 2025, the Company recorded accumulated amortization of $7.4 million for the finance lease ROU asset. Finance lease ROU assets are recorded within property and equipment, net on the Company’s consolidated balance sheets.
As of December 31, 2025, future minimum lease payments during the next five years are as follows (in thousands):
Finance Lease | Operating Lease | Total | |||||||||||||||
| Year Ended December 31, 2026 | 4,834 | 2,485 | 7,319 | ||||||||||||||
| Year Ended December 31, 2027 | 3,223 | 2,496 | 5,719 | ||||||||||||||
| Year Ended December 31, 2028 | — | 2,279 | 2,279 | ||||||||||||||
| Year Ended December 31, 2029 | — | 1,105 | 1,105 | ||||||||||||||
| Year Ended December 31, 2030 | — | 204 | 204 | ||||||||||||||
| Thereafter | — | 6,602 | 6,602 | ||||||||||||||
| Total lease payments | 8,057 | 15,171 | 23,228 | ||||||||||||||
| Less present value discount | (726) | (4,895) | (5,621) | ||||||||||||||
| Total | $ | 7,331 | $ | 10,276 | $ | 17,607 | |||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2022 | Mar 14, 2023 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.