IREN Revenue Jumps 66% to $228 Million as Shares Fall 17% Ahead of Results
Key Facts
IREN reported first-quarter fiscal 2027 results for the three months ended September 30, with revenue of $228 million, up 66% quarter on quarter from $137 million. The announcement came after Thursday’s session on November 5, when the shares closed down about 17%, before results were released after the market close. The company said AI cloud revenue reached $200 million, compared with $28 million from Bitcoin mining. Total revenue came in above revenue estimates, according to Reuters, but the average analyst forecast reported by Investing.com was $230.45 million, higher than the actual result. Cloud business growth thus coincided with a decline in mining and a net loss, while the stock moved amid a broader selloff in emerging cloud computing companies during the results session.
The quarter-on-quarter comparison shows revenue shifting toward AI services: cloud revenue rose from $71 million to $200 million, while Bitcoin mining revenue fell from $67 million to $28 million. The cloud segment’s gross margin was 86%, in line with the previous quarter. Co-CEO Daniel Roberts said the Horizon 1 site entered service for Microsoft and received NVIDIA Exemplar status. He added that annualized operating revenue doubled to $1 billion and AI cloud revenue nearly tripled from its previous level.
By contrast, the company posted a net loss of $263 million for the quarter, compared with a loss of $684 million in the quarter ended June 30. Total assets stood at $20.613 billion. On future commercial commitments, the revenue backlog rose 22% quarter on quarter to $20.3 billion. IREN said about two-thirds of that backlog is tied to investment-grade counterparties, placing part of its future growth trajectory in contracts with those entities.
The shares fell amid a broader sector decline, with Nebius shares closing down about 14% and CoreWeave shares down about 10% in the same session. A Reuters report linked the selloff to a report that Microsoft was tightening oversight of some data center projects at emerging cloud computing providers. In after-hours trading, IREN shares rose 1.5% following the results announcement, according to Investing.com. That move came after the stock had fallen 16.95% at the close, before the company released its results. The after-hours reaction therefore coincided with the cloud growth figures, while the larger decline occurred during the session before the announcement.
The company faces substantial spending needs as it continues to shift its infrastructure. It said it plans to spend an additional $15 billion in capital expenditures in fiscal 2027. It expects to provide $9 billion through cash and committed GPU financing and prepayments. The remaining $6 billion consists of targeted funding sources, including GPU financing, data center financing and company-level sources, and remains subject to market conditions. As a result, part of the spending plan depends on the availability of funding sources that have not yet been finalized, according to the disclosure.
In an update to its timeline, IREN said its operating target for annual recurring revenue of more than $4 billion, previously targeted for the end of 2026, is now targeted for January 2027 and could extend into February. It attributed the change to a customer-requested design modification and supplier timing. The company said the target is an operating metric and does not represent recognized accounting revenue. Recognized revenue increases after data centers are operational and tested and the customer has accepted the service. After the quarter ended, the company said it expanded an existing contract with a leading AI lab and signed a five-year contract at a price of about $22 million per megawatt, with a customer prepayment covering 90% of the associated GPU expenses. It also signed a short-term contract priced at $40 million per megawatt of IT capacity.