IREN AI Cloud Revenue Reaches $200 Million as Contracts Expand and Operating Target Is Delayed
Key Facts
On November 5, 2026, IREN reported results for the first quarter of its 2027 fiscal year, the three months ended September 30, with AI Cloud revenue rising to $200 million from $71 million in the previous quarter. After the quarter ended, the company expanded an existing contract with a leading AI lab and signed a short-term contract and another lasting five years, according to its disclosure. In contrast, Bitcoin mining revenue fell to $28 million from $67 million in the prior period. Cloud activity details showed $135 million in services and $65 million in leasing during the quarter. These figures place growth in cloud computing alongside a decline in mining in the company’s results for the period, while execution of the new contracts and their operating timeline remain the next focus.
Gross margin for the AI Cloud segment was about 86%, in line with the previous quarter, the company said. Revenue backlog also rose 22% quarter over quarter to $20.3 billion as of September 30. IREN said about two-thirds of the backlog was tied to investment-grade counterparties, based on the ratings of the counterparties or their guarantors on that date. The company reported a net loss of $263 million, compared with a loss of $684 million in the quarter ended June 30. Adjusted earnings before interest, taxes, depreciation and amortization were $66 million, versus $19 million in the previous quarter.
The results came amid pressure on the stock: shares closed down 16.95% in Thursday’s November 5 session, then rose 1.5% in after-hours trading following the earnings announcement, according to data reported by Investing.com citing Reuters. MarketWatch reported that the stock had lost 55% over the previous month, including a 17% decline in Thursday’s session. Coverage attributed a limited degree of relief for investors to the results. AI Cloud revenue had reached $128.8 million in the fiscal year ended June 30, 2026, compared with $16.4 million in the previous year, according to the company’s annual results. In fiscal 2026, IREN posted a net loss of $702.6 million after net income of $86.9 million in fiscal 2025.
IREN estimated annual revenue from the new short-term contract at about $40 million per megawatt of IT capacity, while the five-year contract is estimated at about $22 million annually per megawatt of the same capacity. It said the customer’s upfront payment covers 90% of the capital expenditure associated with the graphics processing units in the long-term contract. It also said it contracted for H100 units after the quarter ended at a price equivalent to twice the previous price. For deals during the period, it said estimated contracted prices per megawatt rose 11% in three-year contracts and 12% in five-year contracts. The company did not name the AI lab with which it expanded an existing contract or the customers associated with the new contracts in the cited disclosure.
One execution target is to bring more than $4 billion of contracted annual recurring revenue online by January 31, 2027, with the deadline potentially extending to the end of February. The target had previously been set for the end of 2026, before it was moved following a customer-requested design change and supplier timing, the company said. IREN explained that annual recurring revenue is an operating metric, not a U.S. generally accepted accounting principles metric, and does not replace revenue recognized under accounting rules. It added that recognized revenue may be substantially lower than this metric. The company links meeting the target to the timing of capacity coming online, making the January date and the possibility of an extension into February part of its announced execution plan.
The company estimated remaining planned capital expenditure for fiscal 2027 at about $15 billion. It said $9 billion of that amount would be covered by cash, committed graphics processing unit financing and upfront payments, while it aims to secure $6 billion from sources including graphics processing unit financing, data centers and other sources, subject to market conditions. IREN’s total assets were $20.6 billion as of September 30, including $6 billion in data center assets. Chief Executive Daniel Roberts said the company owns the land, power and data centers associated with its contracts, giving it more options to finance growth and control its pace. The company says it has contracts with NVIDIA, Microsoft and 13 other customers, alongside its existing assets.
In an update on its sites, IREN said Horizon 1 had entered service for Microsoft, while Horizon 2 through Horizon 4 had reached an advanced stage of construction. It also announced that GB300 NVL72 systems at Horizon 1 had received NVIDIA Exemplar Cloud status. The company said construction of liquid-cooled data centers was underway at Sweetwater 1, construction had begun at the 100-megawatt Mackenzie site, and it had a civil works permit for a 300-megawatt project in Badajoz, Spain. Development plans included the conditional listing of the 2-gigawatt Sweetwater Hub in ERCOT’s Batch Zero process as a baseload load. The company says it has more than 30,000 acres of land and more than 5 gigawatts of secured power, while its data center development pipeline exceeds 35 gigawatts; this is an estimate of the potential total capacity of projects at different stages before grid interconnection agreements, and a substantial portion may not become secured power.