IREN Limited (IREN) | The Buildout — AI Infrastructure
The Verdict
IREN builds AI data centers on land it owns, connects them to power it has secured, fills them with GPUs and sells the resulting compute as an AI cloud service. It also owns the software layer that orchestrates those clusters, added through the Mirantis acquisition. Management's stated logic is that owning every layer — power, land, buildings, compute and software — makes each layer underneath worth more, where most of the market rents at least one of them. The company is retiring Bitcoin mining and re-pointing that physical footprint at AI customers.
| Market Cap | — |
| Revenue (TTM) | $707M |
| Revenue Growth | +41.1% |
| EBITDA Margin (TTM) | -89.0% |
| Net Debt | $1.8B |
| Earnings Beats | 1 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Contracted ARR for 2026 capacity is above $4B, with $1B operating — up from about $0.5B exiting the June quarter and excluding $700M of NVIDIA ARR expected in 2027.
- Three-year contract pricing is up about 125% since November and five-year up about 70%, with recent three-year signings above $20M per MW of IT load and live discussions around $25M per MW.
- $6.5B of GPU financing closed in three months — $3.6B investment-grade at a ~6% weighted average and $2.4B at 9% fixed — with prepayments funding more than 100% of associated GPU capex.
- Recent customer prepayments fund 45%–55% of GPU capex, which management frames as customers financing the build-out.
- More than 5 GW of announced or secured power, against which the $4B of contracted ARR comes from less than 10%.
What We’re Watching
- The Microsoft ramp is back-end weighted: management says a significant amount of the December capacity comes online late in the quarter, so the reported revenue effect lands predominantly in the March 2027 quarter.
- The FY27 plan leans on ~$8B of additional GPU financing and prepayments plus a data center financing layer that has not been closed, with the residual funding need left unquantified.
- The 2026 capacity metric moved from 480 MW of AI cloud capacity on the May call to ~300 MW of IT load in August, and management did not reconcile the two.
- Data center and GPU capex is guided up ~15%–20%, and Q1 FY27 cash SG&A is guided up $40M–$50M sequentially, ahead of the revenue step-up.
The direction of the business strengthened across the window even as the reported numbers weakened: the ARR target was raised twice, Horizon 1 was delivered and accepted by Microsoft, and financing workstreams turned into $6.5B of closed deals — while revenue fell for a third consecutive quarter and the net loss scaled with noncash impairments. Contracted ARR and reported revenue are decoupled by roughly a quarter of timing, so the bridge between them is the thing to watch. The open question is whether the FY27 capex plan, the ~$8B of additional financing and the unclosed data center layer all come together while Horizons 2–4 and the 2027 and 2028 capacity come online on schedule.
Earnings
IREN reported $137.2M of revenue in the June 2026 quarter, down $7.6M sequentially, with gross margin of 75.7%. AI Cloud revenue was $70.5M, about half the total, and cost of revenue fell $6.6M on lower mining electricity use. The net loss was $684M, driven by $450.4M of noncash impairments mostly on mining hardware being decommissioned, plus a $102.1M fair-value decrease on mining hardware held for sale.
| Metric | Q4 FY2026 | Q3 FY2026 | Q4 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $137M | $145M | $187M | −26.7% |
| Gross margin | 75.7% | 72.4% | 26.9% | +4880bps |
| EBITDA | −$508M | −$112M | $80M | −733.0% |
| EPS | $-1.89 | $-0.74 | $0.37 | −608.9% |
| AI Cloud revenue | $70.5M | $33.6M | n/a | — |
| ARR (operating) | $1B at the 27-Aug call | ~$0.5B exiting the June quarter | n/a | — |
3-year contract pricing is up about 125% since November, 5-year is up about 70%. Recent 3-year contracts are pricing in excess of $20 million per megawatt of IT load, paying back the compute investment in around 2 years, while active discussions are now at around $25 million per megawatt.— Daniel Roberts, Co-Founder and Co-CEO, 2026-08-27
Management tone: The tone shifted between the May and August 2026 calls. The framing moved from converting the business to AI cloud toward owning the entire stack, and from describing financing workstreams to reporting $6.5B of closed GPU financings. Management disclosed per-megawatt pricing on the August call for the first time in this record and declined to disclose GPU counts for the NVIDIA contract; it did not reconcile the shift from 480 MW of AI cloud capacity to ~300 MW of IT load. On financing conditions the CFO said market conditions can go up and down and the CEO described GPU financing as a market that is forming.
Management Guidance
On the 27-Aug-2026 call, management guided FY27 CapEx of approximately $25B to $30B for the year to June 2027, excluding GPU compute capex for the new liquid-cooled facilities, which it said would fall in the following year's capital plan. It targeted roughly $8B of additional GPU financing and prepayments, with the balance of the requirement met through data center financing, operating cash flows and corporate sources — a residual it did not quantify. It put contracted ARR above $4B by end-December 2026, guided Q1 FY27 cash SG&A up $40M to $50M sequentially, and dated mining decommissioning to end-December 2026.
Trajectory
Revenue has fallen three quarters running — $240.3M in the September 2025 quarter, then $184.7M, $144.8M and $137.2M. The latest decline is attributed by management to decommissioning mining hardware ahead of GPU installations, partly offset by AI cloud growth, with lower electricity use cutting cost of revenue by $6.6M. Gross margin moved from 72.4% to 75.7% quarter over quarter on the segment gross-profit basis, which sits above depreciation, SG&A and impairments. Management says the reported revenue effect from the December capacity lands predominantly in the March 2027 quarter.
The Model
The model projects FY+1 revenue of $2,650M and EBITDA of $1,375M, a 51.9% margin, then FY+2 revenue of $8,407M and EBITDA of $5,599M, a 66.6% margin. The near-term anchor is the contracted ARR for 2026 capacity converting to revenue, which management says lands predominantly in the March 2027 quarter. FY+2 rests on the 2027 and 2028 builds — ~1.2 GW of gross capacity targeted in 2027 and the named 2028 cohort — plus 2027 capacity that management says is in late-stage discussions. The five runs behind the FY+1 revenue figure span $2,400M to $3,559M, a 44% spread.
| Metric | FY2026 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $707M | $2.6B | $8.4B |
| YoY Growth | — | +274.8% | +217.2% |
| EBITDA | −$629M | $1.4B | $5.6B |
| EBITDA Margin | -89.0% | 51.9% | 66.6% |
Projections are the median of 5 independent model runs.
On the 27-Aug-2026 call, management guided FY27 CapEx of approximately $25B to $30B for the year to June 2027, excluding GPU compute capex for the new liquid-cooled facilities, which it said would fall in the following year's capital plan. It targeted roughly $8B of additional GPU financing and prepayments, with the balance of the requirement met through data center financing, operating cash flows and corporate sources — a residual it did not quantify. It put contracted ARR above $4B by end-December 2026, guided Q1 FY27 cash SG&A up $40M to $50M sequentially, and dated mining decommissioning to end-December 2026.
What Could Go Right — and Wrong
- 2027 capacity is signed at or above the ~$25M per MW pricing management reports in live discussions, with prepayments holding at 45%–55% of GPU capex.
- A first data center financing closes against the unencumbered portfolio, funding the FY27 plan and supporting the funding flywheel management describes.
- Reported revenue visibly tracks the contracted ARR from the March 2027 quarter, with gross margin holding as depreciation on the GPU fleet arrives.
- The $700M of NVIDIA contract ARR ramps in 2027, adding a second anchor customer to the booked base.
- Mirantis-managed services and on-demand compute add revenue per megawatt without new grid capacity.
- The ~$8B of additional GPU financing and prepayments, or the data center financing layer, does not close on workable terms, forcing the capex plan to give.
- Horizons 2–4 or the 2027 sites slip again, moving the ARR-to-revenue bridge right for a second time.
- Per-megawatt pricing rolls over as competitor capacity arrives; NVIDIA guides NeoCloud installed capacity from ~3 GW to 8 GW in a year.
- Costs arrive ahead of revenue: capex guided up ~15%–20%, Q1 FY27 cash SG&A up $40M–$50M sequentially, and depreciation scaling as the GPU fleet enters service.
- Further transition impairments beyond the ~$520M estimate, or a longer tail of mining-related charges.
Looking Ahead
The next twelve months are a delivery story. Horizons 2–4 are targeted for the December 2026 quarter, mining is dated to be effectively decommissioned by end-December 2026, and the reported revenue from that capacity is expected predominantly in the March 2027 quarter. Management says it is in late-stage discussions over a significant portion of 2027 capacity, and the FY27 capital plan and the unclosed data center financing remain the moving parts.
- December 2026 quarterHorizons 2–4 delivery — Microsoft acceptance of three more 50 MW liquid-cooled deployments
- End-December 2026Mining decommissioning — Mining operations targeted to be effectively decommissioned
- March 2027 quarterContracted ARR in revenue — Reported revenue should reflect the December capacity
- FY27FY27 financing and capex — ~$8B of additional GPU financing targeted; capex guided $25B–$30B
- 20272027 capacity and NVIDIA ARR — +0.5 GW targeted toward ~1.2 GW gross; $700M NVIDIA ARR
- 20282028 cohort construction — Sweetwater 2, Kiowa, Bundey and Badajoz (~300 MW)
Financials
Annual Summary
| Metric | FY2025 | FY2026 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $501M | $707M | $707M | +41.1% |
| Gross Margin | 48.1% | 69.7% | 68.9% | +2,160bps |
| EBITDA | $196M | −$629M | −$629M | -420.6% |
| EBITDA Margin | 39.2% | -89.0% | -89.0% | 12,813bps |
| Net Income | $6M | −$703M | −$703M | -12213.8% |
| Free Cash Flow | −$856M | −$2.0B | −$2.0B | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)68.9%
- EBITDA Margin (TTM)-89.0%
- Net Margin (TTM)-99.4%
- ROIC-13.9%
- SBC / Revenue24.5%
The Company
IREN describes itself as a vertically integrated AI cloud and data center platform. It sells GPU compute two ways: bare-metal reserved contracts of three to five years priced per megawatt of IT load, and managed cloud built on the Mirantis software layer. Roughly half of June-quarter revenue was labelled AI Cloud; the Bitcoin mining segment it has run since 2019 is being decommissioned, with completion targeted by end-December 2026, and colocation is listed in the 10-K as a potential exploration area with no discrete revenue disclosed.
The operating model is ownership. IREN holds more than 5 GW of announced or secured power across sites in Texas, Oklahoma, British Columbia, Spain and South Australia, with roughly 150,000 GPUs installed or on order as of March 31, 2026. It builds from a repeatable design — the Childress Horizon template, which management says is reused at later sites — says 100% of its data center portfolio is unencumbered, and describes the portfolio as powered by 100% renewable energy, whether from clean sources or purchased RECs. It entered Europe with the Nostrum acquisition, which added about 490 MW of power capacity in Spain, and bought its software layer with Mirantis for about $625M; headcount nearly tripled in FY26 and more than 4,000 people are mobilized across active sites.
Business Segments
Competitive Landscape
IREN's filings list competitors across three lines: AWS, CoreWeave, Crusoe Cloud, Google Cloud, Lambda, Microsoft Azure, Nebius and Oracle Cloud in AI cloud; Bitdeer, Bitfarms, Cipher Mining, CleanSpark, Core Scientific, Hut 8, MARA, Riot and TeraWulf in Bitcoin mining; and Digital Realty, QTS, CyrusOne, Equinix, Vantage and Aligned in colocation. The record's framing is that power rather than contracts is the binding constraint — management calls new grid capacity the scarcest input in the industry, and the intel file's cross-stack theme (MASTER-17) concludes that power procurement is the moat. The peer read-through is that demand currently exceeds supply and pricing is rising, while competitor capacity is also being built at scale.
- CoreWeaveNamed in IREN's 10-K among AI cloud competitors; not otherwise discussed.
- AWSNamed in IREN's 10-K among AI cloud competitors; not otherwise discussed.
- Cipher MiningNamed in IREN's 10-K among Bitcoin mining competitors; not otherwise discussed.
- Hut 8Named in IREN's 10-K among Bitcoin mining competitors; not otherwise discussed.
- BitdeerNamed in IREN's 10-K among Bitcoin mining competitors; not otherwise discussed.
Supply Chain
IREN sits downstream of the GPU and server makers and sells finished compute capacity. Its filings name NVIDIA, Dell, Bitmain, Lenovo, Supermicro and WekaIO; no supplier in this record names IREN, though one competitor cites its pricing.
More on IREN: Earnings recap