IREN — Q1 FY27 Earnings Summary

Financial Performance:

• Total revenue increased 66% sequentially to $228 million for the quarter ended September 30, 2026, compared to $137 million in the prior quarter.
• AI Cloud revenue nearly tripled sequentially to $200 million, up from $71 million, comprising $135 million in AI Cloud Services revenue and $65 million in AI Cloud Lease revenue.
• Bitcoin Mining revenue decreased to $28 million from $67 million in the prior quarter.
• Net loss was $263 million, an improvement from a net loss of $684 million in the prior quarter.
• Adjusted EBITDA increased to $66 million from $19 million, with an Adjusted EBITDA margin of 29% compared to 14% in the prior quarter.
• Total segment gross profit (non-GAAP) increased to $182 million from $104 million.
• AI Cloud segment gross margin was 86%, consistent with the prior quarter.
• Revenue backlog increased 22% sequentially to $20.3 billion, with approximately two-thirds associated with investment-grade counterparties.
• Total assets were $20.6 billion as of September 30, 2026, up from $15.8 billion in the prior quarter.
• Net debt was $4.43 billion as of September 30, 2026, compared to $216 million in the prior quarter.
• Cash and cash equivalents were $3.52 billion, down from $5.90 billion, while restricted cash increased to $2.26 billion from $1.72 billion.
• Deferred revenue increased to $2.54 billion ($127 million current, $2.42 billion non-current) from $1.84 billion ($46 million current, $1.79 billion non-current).

Guidance and Future Outlook:

• The company targets more than $4 billion in Annualized Run-Rate (ARR) revenue to be fully contracted and funded, with a new operational target of January 2027 (previously year-end 2026), potentially extending to February 2027 due to customer-requested design changes and supplier timing.
• Remaining planned FY27 capital expenditure is $15 billion, expected to be funded by $9 billion in cash, committed GPU financing, and prepayments, with the remaining $6 billion subject to market conditions.
• The company targets 0.8GW of data center capacity by the end of calendar 2027.
• Operating ARR doubled to $1 billion during the quarter.

Business Segments and Product Lines:

• AI Cloud:
  • Horizon 1 data center entered service for Microsoft with NVIDIA Exemplar status.
  • Horizon 2-4 progressed to late-stage construction.
  • 2GW Sweetwater Hub received conditional inclusion in ERCOT's Batch Zero process as base load.
  • Liquid-cooled data center construction is underway at Sweetwater 1, with new liquid-cooled centers commencing at the 100MW Mackenzie site.
  • Achieved NVIDIA Exemplar Cloud status for NVIDIA GB300 NVL72 systems at Horizon 1.
  • Advanced IREN AI Cloud with Mirantis k0rdent AI, an NVIDIA Certified Hypervisor.
  • Air-cooled retrofits continued at Childress and Mackenzie sites.
• Bitcoin Mining:
  • Revenue declined to $28 million from $67 million in the prior quarter.
• Development & Land:
  • Secured over 30,000 acres of land supporting over 5GW of secured power and a >35GW development pipeline.
  • Secured civil works license for 300MW development in Badajoz, Spain.
  • Early-stage development work commenced at Sweetwater 2, Kiowa, and Bundey.
• Post-Quarter Contracts:
  • Signed an expanded contract with a Leading Frontier AI Lab.
  • Signed a five-year contract at approximately $22 million per megawatt, with 90% of associated GPU capex prepaid by the customer.
  • Signed a short-term contract at $40 million per megawatt.
  • Contracted H100 GPUs at double the previous pricing.
  • Contracted pricing rose 11% on 3-year deals and 12% on 5-year deals.

Market and Competitive Landscape:

• Assets and revenue are underpinned by customer contracts with NVIDIA, Microsoft, and 13 other customers.
• The company operates as a vertically integrated AI Cloud platform with a portfolio of land and grid-connected power in renewable-rich regions across North America, Europe, and APAC.
• Contracted pricing trends indicate rising demand, with significant increases in per-megawatt revenue for new multi-year agreements.

Risks and Challenges:

• Execution and Timing: Risks include delays in development, construction, commissioning, and delivery of contracted capacity, as well as potential cost overruns.
• Supply Chain: Potential delays, cost increases, or supply reductions for materials and equipment, specifically GPUs, due to global supply chain constraints, tariffs, and high demand.
• Financing: Challenges in obtaining additional capital on commercially reasonable terms to meet substantial capital needs for expansion.
• Regulatory and Permitting: Risks related to securing permits, grid connections, and power capacity, including specific regulatory changes in Texas (ERCOT) and international jurisdictions.
• Counterparty Risk: Exposure to customer credit risk, potential contract termination, or underperformance, particularly given significant customer concentration.
• Asset Obsolescence: Risks regarding the useful life and obsolescence of hardware (GPUs, Bitcoin mining equipment) and potential impairment charges upon retirement.
• Market Volatility: Risks associated with Bitcoin price fluctuations, global hashrate changes, and foreign currency exchange rates.
• Integration: Risks related to successfully integrating recently acquired businesses (Mirantis, Nostrum Group) and achieving anticipated benefits.

Management Commentary and Tone:

• Daniel Roberts, Co-Founder and Co-CEO, stated that the quarter saw Horizon 1 go into service for Microsoft, AI Cloud revenue nearly triple, and operating ARR double to $1 billion.
• Management expressed confidence in the funding strategy, noting that the $4 billion ARR target is fully funded and that owning land, power, and data centers provides flexibility to set the pace of growth.
• The tone reflects strong momentum in the AI Cloud segment, driven by new contracts and the progression of construction projects, despite the shift in the ARR target timeline.

Other Key Points:

• Acquisitions: The company recently acquired Mirantis, Inc. and Ingenostrum, S.L. (Nostrum Group), with integration efforts ongoing.
• Capital Raising: Proceeds from the issuance of ordinary shares were $498 million in the quarter, compared to $2.11 billion in the prior quarter.
• Financing: Proceeds from financing facilities were $2.36 billion in the quarter.
• Rounding Convention: Beginning Q1 FY27, the company changed its rounding convention to the nearest million dollars, which may cause minor discrepancies in totals compared to prior periods.
• Conference Call: An audio webcast was hosted on November 5, 2026, to discuss the results.