v3.26.1
FAIR VALUE MEASUREMENTS
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets and liabilities measured at fair value are classified and disclosed in one of the following categories based on the inputs used to derive the fair value:
Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
Level 2 — Quoted prices in markets that are not active and financial instruments for which all significant inputs are observable, either directly or indirectly; or
Level 3 — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable
The Company’s financial assets and liabilities subject to fair value measurement on a recurring basis and the level of inputs used for such measurements were as follows as of the dates indicated (in thousands):
Fair Value Measured as of June 30, 2026
Level 1Level 2Level 3Total
Assets included in:
Cash and cash equivalents
Money market securities$827,223 $- $- $827,223 
Restricted cash
Money market securities3,725,219 - - 3,725,219 
Bitcoin37,802 - - 37,802 
Accounts receivable
Bitcoin receivable222 - - 222 
Prepaid expenses and other current assets
Investments at fair value15,430 - - 15,430 
Derivative asset- - 22,680 22,680 
$4,605,896 $- $22,680 $4,628,576 
Liabilities included in:
Warrant liability- - 632,060 632,060 
$- $- $632,060 $632,060 
Fair Value Measured as of December 31, 2025
Level 1Level 2Level 3Total
Assets included in:
Cash and cash equivalents
Money market securities$535,085 $- $- $535,085 
Restricted cash
Money market securities2,035,631 - - 2,035,631 
Bitcoin125,400 - - 125,400 
Accounts receivable687 - - 687 
Derivative assets- - 56,810 56,810 
$2,696,803 $- $56,810 $2,753,613 
Liabilities included in:
Warrant liability$- $- $525,160 $525,160 
$- $- $525,160 $525,160 
The Company’s financial assets and liabilities not subject to fair value measurement on a recurring basis and the level of inputs used for such measurements were as follows as of the dates indicated (in thousands):
June 30, 2026
Total carrying valueLevel 1Level 2Level 3Total
Liabilities included in:
Long-term borrowings
2030 Convertible Notes$168,168 $- $912,563 $- $912,563 
2031 Convertible Notes901,456 - 2,280,811 - 2,280,811 
Cipher Compute 2030 Senior Secured Notes1,708,805 - 1,805,769 - 1,805,769 
Black Pearl Compute 2031 Senior Secured Notes1,966,807 - 2,029,200 - 2,029,200 
Stingray Compute 2031 Senior Secured Notes796,114 - 813,005 - 813,005 
$5,541,350 $- $7,841,348 $- $7,841,348 
December 31, 2025
Total carrying valueLevel 1Level 2Level 3Total
Liabilities included in:
Long-term borrowings
2030 Convertible Notes$167,643 $- $597,768 $- $597,768 
2031 Convertible Notes$870,842 $- $1,547,533 $- $1,547,533 
Cipher Compute 2030 Senior Secured Notes$1,710,956 $- $1,769,514 $- $1,769,514 
$2,749,441 $- $3,914,815 $- $3,914,815 
The carrying values reported in the Company’s condensed consolidated balance sheets for cash (excluding cash equivalents which are recorded at fair value on a recurring basis), accounts payable and accrued expenses and other current liabilities are reasonable estimates of their fair values due to the short-term nature of these items.
There were no transfers of financial instruments between Level 1, Level 2 and Level 3 during the periods presented.
Power purchase agreement
The Company’s power purchase agreement, related to the Luminant Power Agreement, is divided between current and noncurrent assets, and was initially recorded on its condensed consolidated balance sheets on the derivative asset’s effective date of July 1, 2022, with an offsetting amount recorded to change in fair value of derivative asset in costs and operating expenses on the condensed consolidated statements of operations. Subsequent changes in fair value are also recorded to Change in fair value of derivative asset. The Luminant Power Agreement was not designated as a hedging instrument. The estimated fair value of the Company’s derivative asset was derived from Level 2, and Level 3 inputs, due to a lack of quoted prices for similar type assets and as such, is classified in Level 3 of the fair value hierarchy. Specifically, the discounted cash flow estimation models contain quoted spot and forward prices for electricity, as well as estimated usage rates consistent with the terms of the Luminant Power Agreement, the initial term of which is five years, and a remaining term of approximately 1.1 years. The valuations performed by the third-party valuation firm engaged by the Company utilized pre-tax discount rates of 5.05% and 4.80% as of June 30, 2026 and December 31, 2025, respectively, and include observable market inputs, but also include unobservable inputs based on qualitative judgment related to company-specific risk factors. Unrealized gains and losses associated with the derivative asset within the Level 3 category include changes in fair value that were attributable to amendments to the Luminant Power Agreement, changes to the quoted forward electricity rates, as well as unobservable inputs (e.g., changes in estimated usage rates and discount rate assumptions).
The following table presents the changes in the estimated fair value of the power purchase agreement measured using significant unobservable inputs (Level 3) for the six months ended June 30, 2026 and 2025 (amounts in thousands):
Six Months Ended June 30,
20262025
Opening balance$56,810 $85,670 
Change in fair value(34,130)(8,150)
Ending balance$22,680 $77,520 
Level 3 liabilities

Google Warrants
The Company’s Google Warrants (as defined in Note 16. Warrants) were classified within Level 3 of the fair value hierarchy because the fair value is based on significant inputs that are unobservable in the market. The valuation of the Google Warrants used assumptions and estimates the Company believes would be made by a market participant in making the same valuation. The initial valuation of the Google Warrants was recorded to Warrant liability on the Company’s condensed consolidated balance sheets, and subsequent changes in fair value are also recorded to Change in fair value of warrant liability in the Company’s condensed consolidated statements of operations.
The Company engaged a third-party valuation firm to determine the fair value of the Google Warrants using a Black-Scholes option-pricing model and the quoted price of Common Stock. The following table presents significant assumptions utilized in the valuations of the Google Warrants as of the date indicated:
June 30, 2026
Risk-free rate3.87%
Dividend yield rate0.00%
Volatility103.00%
Contractual term (in years)4.25
The following table presents changes in the estimated fair value of the Google Warrants (amounts in thousands):
Balance as of December 31, 2025525,160 
Change in fair value106,900 
Balance as of June 30, 2026$632,060