10-K · August 27, 2026
IREN is executing an aggressive transition from Bitcoin mining to AI Cloud Services, with AI Cloud revenue rising to $128.8 million and contracted future demand reaching approximately $16.6 billion across RPO and lease…
Earnings analysis · 10-Q
IREN earnings analysis
Filed November 5, 2026 · Our reading of the company's report
The latest report
IREN’s quarter showed a sharp strategic shift toward AI Cloud: AI Cloud revenue rose to $200 million, offsetting most of the decline in Bitcoin Mining revenue, while gross margin improved to 79.8%. Nevertheless, the…
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IREN’s quarter showed a sharp strategic shift toward AI Cloud: AI Cloud revenue rose to $200 million, offsetting most of the decline in Bitcoin Mining revenue, while gross margin improved to 79.8%. Nevertheless, the company remained deeply loss-making, with a $263 million net loss, $5.146 billion of investing cash outflows and $18.947 billion of capital commitments. The outlook is mixed: contracted demand and backlog are substantial, but delivery timing has slipped and the expansion requires materially higher debt, equity and customer-prepayment funding.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $-0.66
What stood out
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Revenue rebounded on AI Cloud growth
Revenue was $228 million, up from $137 million in the immediately preceding quarter, an increase of approximately 66%. However, revenue was down from $240 million in the prior-year quarter, primarily because Bitcoin Mining revenue declined from $233 million to $28 million.
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AI Cloud became the growth engine
AI Cloud revenue reached $200 million versus $7 million a year earlier, consisting of $135 million of AI Cloud Services revenue and $65 million of AI Cloud Lease revenue. Management attributed the increase to capacity expansion, new customers and the commencement of lease revenue following Microsoft’s acceptance of Horizon 1.
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Gross margin expanded sequentially
Gross profit was $182 million on $228 million of revenue, implying a 79.8% gross margin versus 75.7% in the prior quarter and approximately 66.3% a year earlier. Segment gross profit was $172 million for AI Cloud and $10 million for Bitcoin Mining.
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Operating loss remains substantial
Operating loss was $186 million, or an -81.6% operating margin, improving from the prior quarter’s -426.1% margin but worsening from -31.7% in the prior-year quarter. Adjusted EBITDA was $66 million, with a 29% Adjusted EBITDA margin versus $92 million and 38% a year earlier.
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Contract prepayments funded operations
Operating cash flow was $529 million, up from $142 million a year earlier, supported by a $645 million increase in deferred revenue from AI Cloud contracts. Cash used in investing was $5.146 billion, including $2.693 billion for computer hardware and $2.131 billion for property, plant and equipment.
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Contracted backlog supports expansion
AI Cloud contracted value continued to build: remaining performance obligations under ASC 606 were $6.347 billion, while remaining aggregate contracted lease value was approximately $13.957 billion. Operating AI Cloud capacity was approximately 93MW as of September 30, 2026.
What to watch
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Large loss and rising financing costs
The company had a net loss of $263 million and a diluted loss per share of $0.66, compared with net income of $385 million and diluted EPS of $1.08 in the prior-year quarter. Finance expense also increased to $73 million from $9 million.
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Heavy cash burn and leverage
Cash, cash equivalents and restricted cash declined to $5.778 billion from $7.620 billion during the quarter despite $2.779 billion of financing inflows. Total debt increased to $9.897 billion, net of issuance costs, from $7.593 billion at June 30, 2026.
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Large unfunded capital requirements
Capital commitments increased to $18.947 billion from $13.810 billion at June 30, 2026. Management stated that it expects significant investments for the foreseeable future and may commit to GPU purchases before arranging financing or executing customer contracts.
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Customer delivery timing slipped
Certain contracted capacity targeted for delivery by December 31, 2026 is now expected in the following quarter because of a customer-requested design change, supply timing and third-party delays. The filing states that delays can postpone revenue and expose the company to service credits, damages or termination rights.
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Significant customer concentration
The three largest customers represented approximately 28%, 24% and 18% of total revenue for the quarter. The filing warns that a loss of, default by or reduction in capacity taken by any major customer could materially affect revenue and the ability to service related indebtedness.
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Bitcoin transition reduces legacy revenue
Bitcoin Mining revenue fell to $28 million from $233 million as average operating hashrate declined to 8.8 EH/s from 45.3 EH/s. The company also recognized a $21 million decrease in the fair value of Bitcoin miners held for sale.
Management's outlook
No numeric revenue or EPS guidance was provided in the 10-Q. Management expects to substantially complete the transition from Bitcoin mining to AI Cloud by December 31, 2026, with immaterial Bitcoin mining operations expected through calendar year 2027. Certain capacity targeted for delivery by December 31, 2026 is now expected during the following quarter because of a customer-requested design change, supply timing and third-party delays.
Earlier filings 3
10-Q · May 8, 2026
IREN reported Q3 FY26 results with significant challenges, including a sharp revenue drop to $144.8 million, well below the $218 million expectations. The loss expanded to $247.8 million compared to $16.1 million in the…
10-Q · November 6, 2025
IREN reported Q1 revenue of $240.295M and diluted EPS of $1.08, both beating consensus. Revenue rose sharply year-over-year from $52.764M and quarter-over-quarter from $116M, while net income of $384.611M was driven…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.