IREN remains to be largely a Bitcoin miner by income, even because it retires mining {hardware} to make room for AI infrastructure and develop IREN’s AI cloud income.
The corporate’s fiscal 2026 results, filed Aug. 27, present Bitcoin mining generated $578.2 million of IREN’s $707 million in annual income, or about 81.8%. AI Cloud Companies contributed $128.8 million.
That ongoing transition produced a $638.8 million non-cash impairment, primarily tied to decommissioning miners as information middle websites had been transformed for AI workloads. IREN additionally reported a $702.6 million internet loss, which was affected by the impairment and different gadgets. The cost was not a $638.8 million money outflow, but it surely put an accounting worth on belongings retired earlier than the substitute enterprise had totally entered service.
IREN AI cloud income faces a $3 billion working hole
As of Aug. 26, IREN had $1 billion of working annualized run-rate income, or ARR, towards $4 billion of contracted ARR for its 2026 capability. IREN targets the bigger run fee to be operational by Dec. 31.
The corporate calculates ARR from contracted GPU pricing multiplied by a full 12 months of hours, together with storage and associated companies. It’s an working measure, not GAAP income, and IREN warns that acknowledged income could also be materially decrease. Closing the hole depends upon bodily infrastructure being delivered and accepted, in addition to the corporate’s utilization and pricing assumptions.
IREN’s Form 10-K says income usually begins solely after information facilities are constructed and energized, tools is put in and commissioned, efficiency testing is full and prospects settle for the capability. Delays can postpone income whereas financing and working prices proceed, and might set off delay or service credit.
The timeline is staged. Microsoft accepted Horizon 1 in August. Horizons 2 by 4 had been focused for phased supply in calendar This fall 2026, with contractual grace intervals extending into the start of calendar Q2 2027.
At June 30, IREN nonetheless had put in Bitcoin mining capability of about 23.2 EH/s throughout roughly 380MW. The corporate aimed to considerably full the transition of that information middle capability towards AI Cloud Companies by year-end.
Delay additionally carries a financing value. IREN raised GPU financing to assist the Microsoft contract by a delayed-draw mortgage priced at one-month SOFR plus 2.25% and senior notes at 5.96%, with tranches topic to situations. A separate Mackenzie financing of as much as $2.4 billion carries a 9% mounted fee and matures 30 months after every related staged funding date.
Microsoft and NVIDIA collectively represented a considerable majority of contracted income, in keeping with IREN. New prospects diversify the roster, however acceptance, efficiency and counterparty dangers stay concentrated.
IREN has contracts that might change the mining enterprise on a run-rate foundation. The submitting doesn’t present that substitute as accomplished. The subsequent proof is buyer acceptance of the remaining deployments and the GAAP AI income they start to supply.
