TLDR
- IREN reported net income of $384.6 million for Q1, reversing a $51.7 million loss from the same period last year
- Revenue jumped 355% to $240.3 million, with bitcoin mining contributing $232.9 million
- Earnings per share hit $1.08, crushing analyst expectations of 16 cents per share
- The company secured a five-year, $9.7 billion AI cloud contract with Microsoft
- IREN targets $3.4 billion in AI Cloud revenue by end of 2026 with expansion to 140,000 GPUs
IREN posted record financial results for the quarter ended September 30. The company’s transformation from pure bitcoin mining to AI cloud services is paying off faster than Wall Street expected.
Net income reached $384.6 million compared to a loss of $51.7 million in the same quarter last year. Total revenue hit $240.3 million, up 355% year over year.
The earnings surprised analysts who had predicted just 16 cents per share. IREN delivered $1.08 per share instead. That’s a 575% beat on expectations.
IREN Limited, IREN
Bitcoin mining revenue alone accounted for $232.9 million of the total. That’s 50 times higher than the previous year’s figure. The mining operation continues to generate cash while the company builds out its AI infrastructure.
The stock dropped more than 12% on Thursday following the earnings release. Shares were down 3% in pre-market trading Friday despite initially rising as much as 6%.
Microsoft Deal Changes the Game
The real story here is the Microsoft partnership announced Monday. The five-year contract is worth $9.7 billion and includes phased deployments at IREN’s Childress site through 2026.
Microsoft will prepay 20% of the contract value upfront. The deal is expected to generate $1.9 billion in annualized run-rate revenue once fully operational.
IREN also signed multiyear contracts with Together AI, Fluidstack, and Fireworks AI. These partnerships support the company’s plan to reach $3.4 billion in AI Cloud revenue by the end of 2026.
The company plans to expand its GPU capacity to 140,000 units. That’s a big jump from current levels.
Infrastructure Expansion Accelerates
IREN is converting its British Columbia facilities from ASIC-based mining to GPU operations. The 160MW facility should complete the transition by the end of 2026.
Construction continues on liquid-cooled Horizon data centers at the Childress site. That facility has 750MW of power capacity with 200MW allocated to the new data centers.
The Sweetwater Hub represents the company’s largest power capacity at 2GW. Key substations at this location will come online over the next two years.
Co-founder and co-CEO Daniel Roberts said the company is executing with discipline. The record results validate IREN’s strategy of repurposing mining infrastructure for AI workloads.
IREN is part of a larger trend in the crypto mining industry. Companies like Mara Holdings are following similar paths. These miners have experience running large-scale data centers and securing cheap power.
Wall Street maintains a bullish outlook on the stock. Nine analysts rate it as a strong buy or buy. Two analysts have hold ratings and two recommend selling.
The median 12-month price target sits at $75.00. That’s about 10.7% above the most recent closing price of $66.96. Analyst earnings estimates have fallen by 42.1% over the last three months though.
Four analysts revised their earnings estimates lower in the past 30 days. The stock has gained 581.9% so far this year and rose 42.7% in the most recent quarter.
IREN reported quarterly adjusted earnings of $1.08 per share against analyst expectations ranging from 5 cents to 25 cents.
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Source: https://blockonomi.com/iren-stock-drops-despite-bitcoin-miner-crushing-earnings/