IREN Pushes Its $4 Billion Target Into 2027

NEW YORK, Nov. 5 — IREN,IREN, which builds data centers and rents out the AI computing inside them, said on Thursday that more than $4 billion of annualized revenue it had targeted for the end of 2026 is now targeted for January, and may slip to February. The cause, it said, was “a customer-requested change and supplier timing.”Annualized RevenueIREN’s ARR is the hourly price of its commissioned, contracted GPUs times 8,760 hours, plus storage and extras. It says the target is for more than $4 billion to be operational by Jan. 31, 2027, and that “recognized revenue may be materially lower.”

It reported the delay after the close, on a day its shares fell 16.95 percent, to $18.03, in the rout of AI stocks.

IREN is one of the neoclouds, the young companies that rent out GPUs to AI labs and big cloud companies, and it reported days before two of its rivals. Its report shows where their risk now sits: in building on time, and in paying for it. Of the $15 billion IREN plans to spend on data centers and GPUs in the rest of its fiscal year, which ends in June, $9 billion is covered by cash, committed GPU financing and prepayments; the other $6 billion is to come from target financing, prepayments and other sources “subject to market conditions,” it said.

“Capital markets have become more selective in the last few weeks, and the questions have undoubtedly moved from how big the contract is to whether it can be delivered, financed, and run at a profit,” Daniel Roberts, a co-founder and co-chief executive, said on the call, as quoted by CNBC.

Capital markets have become more selective in the last few weeks, and the questions have undoubtedly moved from how big the contract is to whether it can be delivered, financed, and run at a profit.

The customer is Microsoft, Mr. Roberts said on the call, CNBC reported. “They made a request to reconfigure and upgrade some of the network infrastructure and the purpose of that was really to enable the 200 megawatts of capacity to service these latest-generation frontier models,” he said, as CNBC quoted him. IREN says the more than $4 billion is fully contracted and fully funded.“Fully Funded”By IREN’s definition, cash, undrawn committed GPU financing and customer prepayments cover the rest of the program behind the target, subject to the conditions on its financing facilities, including the release of escrowed proceeds. These sources include restricted cash and contracted prepayments not yet received.

The Quarter

Revenue in the three months to Sept. 30 rose 66 percent from the June quarter, to $228 million, of which AI Cloud brought in $200 million, nearly three times its $71 million. Bitcoin mining, IREN’s old business, fell to $28 million from $67 million. Revenue beat the average analyst estimate of $221 million, according to LSEG, CNBC reported. The net loss narrowed to $263 million, from $684 million in the June quarter, which included $450 million of impairments; adjusted EBITDA, IREN’s non-GAAP measure, was $66 million.

IREN is borrowing to build: its net debt rose to $4.43 billion on Sept. 30, from $216 million three months earlier, on IREN’s own non-GAAP measure, which also deducts restricted cash. Its debt, counting finance leases, rose to $10.21 billion from $7.84 billion, and its unrestricted cash fell to $3.52 billion from $5.90 billion. It paid $4.82 billion for property, plant, equipment and computer hardware in the quarter, by our arithmetic.

IREN points to its prices. Since Sept. 30, it said, it has signed a five-year contract worth about $22 million a year in revenue for each megawatt of IT capacity, with the customer prepaying 90 percent of the GPU spending, and a short-term contract at $40 million a megawatt; both figures are its own estimates. It put its revenue backlog at $20.3 billion, about two-thirds of it with investment-grade counterparties, under contracts with Nvidia, Microsoft and 13 other customers. “There is a disconnect between what we’re seeing in public market and what we’re seeing at the customer level,” Mr. Roberts told CNBC’s Seema Mody.

CNBC wrote that concerns were mounting that cash-burning companies reliant on debt would struggle to meet their obligations as interest rates rise and lenders back out. IREN’s close on Thursday was 26.29 percent below Tuesday’s close of $24.46, by our arithmetic, and CNBC put its fall over the past month at 55 percent.

What to Watch

The shares rose in extended trading. Nasdaq recorded Thursday’s last after-hours trade at $19.95, at 7:59 p.m., up 10.65 percent. Its snapshot of Friday’s trading before the open, as of 8:35 a.m., listed a trade at $20.82 at 8:19 a.m., up 15.47 percent.

The next neoclouds to report will show whether IREN’s delay is its own or the trade’s: CoreWeave holds its call on Tuesday, Nov. 10, at 5 p.m. Eastern, and Nebius reports on Thursday, Nov. 12, before the open. CNBC put CoreWeave’s fall over the past month at 60 percent, and Nebius’s at 48.