v3.26.1
LEASES
 6 Months Ended
Jun. 30, 2026
Leases [Abstract]  
LEASES LEASES
Lessor Accounting
In September 2025, the Company, through its wholly owned subsidiary Cipher Barber Lake LLC, entered into a lease for the development, construction, and lease of an HPC data center facility (the “Barber Lake Facility Lease”). The Company expects to deliver the facility in September 2026. The tenant’s obligations to pay rent under the lease begins on the commencement date 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 the tenant, and failure to provide these services may result in additional costs under the lease.
In October 2025, the Company entered into a 15-year lease agreement with an investment grade hyperscaler tenant to deliver approximately 300 gross MW of turnkey data center capacity at the Black Pearl Facility, with phased delivery expected to commence in 2026. The sublease provides three five-year extension options, as well as a short-term extension option under specified conditions. The Company is required to provide ongoing services including power, operations and maintenance, and other operating services, and may be subject to rent credits or other remedies for failure to achieve specified milestones.
In March 2026, the Company, through a wholly owned subsidiary, entered into a data center lease agreement with an investment grade hyperscaler tenant for the development, construction, and lease of an additional HPC data center facility at one of the Company’s existing sites in Texas. The initial term of the lease is 15 years, with multiple extension options at the tenant's election. The Company is responsible for construction of the facility, with phased delivery expected to begin in 2027. Base rent is abated prior to the first phase commencement date and commences on a per-phase basis as each phase is
delivered. The Company is required to provide ongoing services including power, operations and maintenance, and other operating services, and may be subject to rent credits or other remedies for failure to achieve specified delivery milestones.
These leases have not commenced and no revenue has been recognized as of June 30, 2026. As of June 30, 2026, the Company recorded $25.5 million of Deferred revenue on its condensed consolidated balance sheet, representing amounts billed to, or received from HPC tenants for tenant-requested change orders. These amounts will be recognized over the lease term.
Lessee Accounting
Odessa Facility Lease
The Company entered into a series of agreements with affiliates of Luminant, including the Lease Agreement dated June 29, 2021, as amended and restated 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, Leases (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.
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.
In April 2026, the Company entered into an operating lease for office space in New York, New York.
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 June 30,Six Months Ended June 30,
2026202520262025
Finance leases:
Amortization of ROU assets (1)
$503 $761 $1,005 $1,522 
Interest on lease liability164 272 356 570 
Total finance lease expense667 1,033 1,361 2,092 
Operating leases:
Operating lease expense1,787 660 2,441 1,285 
Total operating lease expense1,787 660 2,441 1,285 
Total lease expense$2,454 $1,693 $3,802 $3,377 
(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 June 30,Six Months Ended June 30,
2026202520262025
Operating cash flows - operating lease$994 $565 $1,629 $1,078 
Right-of-use asset obtained in exchange for operating lease liabilities
$29,021 $491 $29,021 $491 
June 30, 2026December 31, 2025
Weighted-average remaining lease term – finance lease (in years)1.21.7
Weighted-average remaining lease term – operating lease (in years)10.07.3
Weighted-average discount rate – finance lease11.0 %11.0 %
Weighted-average discount rate – operating lease7.8 %8.0 %
Finance lease ROU assets(1)
$2,346 $5,073 
(1)As of June 30, 2026, the Company recorded accumulated amortization of $8.4 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 June 30, 2026, future minimum lease payments are as follows (in thousands):
Finance Lease
Operating Lease
Total
Remainder of Year Ending December 31, 20262,417 1,235 3,652 
Year Ending December 31, 20273,222 5,417 8,639 
Year Ending December 31, 2028— 7,184 7,184 
Year Ending December 31, 2029— 5,976 5,976 
Year Ending December 31, 2030— 4,950 4,950 
Thereafter— 36,525 36,525 
Total lease payments5,639 61,287 66,926 
Less present value discount(369)(21,107)(21,476)
Total$5,270 $40,180 $45,450 
LEASES LEASES
Lessor Accounting
In September 2025, the Company, through its wholly owned subsidiary Cipher Barber Lake LLC, entered into a lease for the development, construction, and lease of an HPC data center facility (the “Barber Lake Facility Lease”). The Company expects to deliver the facility in September 2026. The tenant’s obligations to pay rent under the lease begins on the commencement date 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 the tenant, and failure to provide these services may result in additional costs under the lease.
In October 2025, the Company entered into a 15-year lease agreement with an investment grade hyperscaler tenant to deliver approximately 300 gross MW of turnkey data center capacity at the Black Pearl Facility, with phased delivery expected to commence in 2026. The sublease provides three five-year extension options, as well as a short-term extension option under specified conditions. The Company is required to provide ongoing services including power, operations and maintenance, and other operating services, and may be subject to rent credits or other remedies for failure to achieve specified milestones.
In March 2026, the Company, through a wholly owned subsidiary, entered into a data center lease agreement with an investment grade hyperscaler tenant for the development, construction, and lease of an additional HPC data center facility at one of the Company’s existing sites in Texas. The initial term of the lease is 15 years, with multiple extension options at the tenant's election. The Company is responsible for construction of the facility, with phased delivery expected to begin in 2027. Base rent is abated prior to the first phase commencement date and commences on a per-phase basis as each phase is
delivered. The Company is required to provide ongoing services including power, operations and maintenance, and other operating services, and may be subject to rent credits or other remedies for failure to achieve specified delivery milestones.
These leases have not commenced and no revenue has been recognized as of June 30, 2026. As of June 30, 2026, the Company recorded $25.5 million of Deferred revenue on its condensed consolidated balance sheet, representing amounts billed to, or received from HPC tenants for tenant-requested change orders. These amounts will be recognized over the lease term.
Lessee Accounting
Odessa Facility Lease
The Company entered into a series of agreements with affiliates of Luminant, including the Lease Agreement dated June 29, 2021, as amended and restated 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, Leases (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.
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.
In April 2026, the Company entered into an operating lease for office space in New York, New York.
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 June 30,Six Months Ended June 30,
2026202520262025
Finance leases:
Amortization of ROU assets (1)
$503 $761 $1,005 $1,522 
Interest on lease liability164 272 356 570 
Total finance lease expense667 1,033 1,361 2,092 
Operating leases:
Operating lease expense1,787 660 2,441 1,285 
Total operating lease expense1,787 660 2,441 1,285 
Total lease expense$2,454 $1,693 $3,802 $3,377 
(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 June 30,Six Months Ended June 30,
2026202520262025
Operating cash flows - operating lease$994 $565 $1,629 $1,078 
Right-of-use asset obtained in exchange for operating lease liabilities
$29,021 $491 $29,021 $491 
June 30, 2026December 31, 2025
Weighted-average remaining lease term – finance lease (in years)1.21.7
Weighted-average remaining lease term – operating lease (in years)10.07.3
Weighted-average discount rate – finance lease11.0 %11.0 %
Weighted-average discount rate – operating lease7.8 %8.0 %
Finance lease ROU assets(1)
$2,346 $5,073 
(1)As of June 30, 2026, the Company recorded accumulated amortization of $8.4 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 June 30, 2026, future minimum lease payments are as follows (in thousands):
Finance Lease
Operating Lease
Total
Remainder of Year Ending December 31, 20262,417 1,235 3,652 
Year Ending December 31, 20273,222 5,417 8,639 
Year Ending December 31, 2028— 7,184 7,184 
Year Ending December 31, 2029— 5,976 5,976 
Year Ending December 31, 2030— 4,950 4,950 
Thereafter— 36,525 36,525 
Total lease payments5,639 61,287 66,926 
Less present value discount(369)(21,107)(21,476)
Total$5,270 $40,180 $45,450 
LEASES LEASES
Lessor Accounting
In September 2025, the Company, through its wholly owned subsidiary Cipher Barber Lake LLC, entered into a lease for the development, construction, and lease of an HPC data center facility (the “Barber Lake Facility Lease”). The Company expects to deliver the facility in September 2026. The tenant’s obligations to pay rent under the lease begins on the commencement date 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 the tenant, and failure to provide these services may result in additional costs under the lease.
In October 2025, the Company entered into a 15-year lease agreement with an investment grade hyperscaler tenant to deliver approximately 300 gross MW of turnkey data center capacity at the Black Pearl Facility, with phased delivery expected to commence in 2026. The sublease provides three five-year extension options, as well as a short-term extension option under specified conditions. The Company is required to provide ongoing services including power, operations and maintenance, and other operating services, and may be subject to rent credits or other remedies for failure to achieve specified milestones.
In March 2026, the Company, through a wholly owned subsidiary, entered into a data center lease agreement with an investment grade hyperscaler tenant for the development, construction, and lease of an additional HPC data center facility at one of the Company’s existing sites in Texas. The initial term of the lease is 15 years, with multiple extension options at the tenant's election. The Company is responsible for construction of the facility, with phased delivery expected to begin in 2027. Base rent is abated prior to the first phase commencement date and commences on a per-phase basis as each phase is
delivered. The Company is required to provide ongoing services including power, operations and maintenance, and other operating services, and may be subject to rent credits or other remedies for failure to achieve specified delivery milestones.
These leases have not commenced and no revenue has been recognized as of June 30, 2026. As of June 30, 2026, the Company recorded $25.5 million of Deferred revenue on its condensed consolidated balance sheet, representing amounts billed to, or received from HPC tenants for tenant-requested change orders. These amounts will be recognized over the lease term.
Lessee Accounting
Odessa Facility Lease
The Company entered into a series of agreements with affiliates of Luminant, including the Lease Agreement dated June 29, 2021, as amended and restated 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, Leases (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.
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.
In April 2026, the Company entered into an operating lease for office space in New York, New York.
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 June 30,Six Months Ended June 30,
2026202520262025
Finance leases:
Amortization of ROU assets (1)
$503 $761 $1,005 $1,522 
Interest on lease liability164 272 356 570 
Total finance lease expense667 1,033 1,361 2,092 
Operating leases:
Operating lease expense1,787 660 2,441 1,285 
Total operating lease expense1,787 660 2,441 1,285 
Total lease expense$2,454 $1,693 $3,802 $3,377 
(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 June 30,Six Months Ended June 30,
2026202520262025
Operating cash flows - operating lease$994 $565 $1,629 $1,078 
Right-of-use asset obtained in exchange for operating lease liabilities
$29,021 $491 $29,021 $491 
June 30, 2026December 31, 2025
Weighted-average remaining lease term – finance lease (in years)1.21.7
Weighted-average remaining lease term – operating lease (in years)10.07.3
Weighted-average discount rate – finance lease11.0 %11.0 %
Weighted-average discount rate – operating lease7.8 %8.0 %
Finance lease ROU assets(1)
$2,346 $5,073 
(1)As of June 30, 2026, the Company recorded accumulated amortization of $8.4 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 June 30, 2026, future minimum lease payments are as follows (in thousands):
Finance Lease
Operating Lease
Total
Remainder of Year Ending December 31, 20262,417 1,235 3,652 
Year Ending December 31, 20273,222 5,417 8,639 
Year Ending December 31, 2028— 7,184 7,184 
Year Ending December 31, 2029— 5,976 5,976 
Year Ending December 31, 2030— 4,950 4,950 
Thereafter— 36,525 36,525 
Total lease payments5,639 61,287 66,926 
Less present value discount(369)(21,107)(21,476)
Total$5,270 $40,180 $45,450