IREN Stock Drops 7% After Q4 Revenue Miss Despite AI Cloud Growth

TLDR

• IREN reported Q4 revenue of $137.2 million, missing Wall Street’s forecast of $157.14 million by about 12.7%
• AI Cloud revenue hit $70.5 million, making up 51.4% of total revenue for the first time
• The company posted a net loss of $684 million, mostly from non-cash impairments tied to its exit from bitcoin mining
• ARR climbed to $1 billion after Microsoft accepted Horizon 1, with management targeting $4 billion by December
• The stock fell 7.23% in after-hours trading after closing the regular session at $40.53

IREN reported fourth-quarter revenue of $137.2 million on Wednesday, falling short of the Wall Street consensus of $157.14 million. The stock closed the regular session at $40.53, up 2.4%, before dropping 7.23% in after-hours trading to $37.60.

IREN Limited, IREN

The revenue shortfall of roughly $19.9 million, or about 12.7% below estimates, came as the company continued winding down its bitcoin mining operations ahead of new GPU installations.

EPS came in at a loss of $0.41, beating the Zacks consensus estimate of a loss of $0.50 per share. That represents an earnings surprise of 18%.

$IREN FY26 EARNINGS HIGHLIGHTS

🔹 Q4 Revenue: $137.2M (Est. $137M) 🟡
🔹 Q4 Adj. EBITDA: $19.2M (Est. $41.1M) 🔴
🔹 Q4 AI Cloud Revenue: $70.5M; from $33.6M
🔹 Q4 Net Loss: $684.0M; incl. $450.4M impairments

FY26 Results:
🔹 Revenue: $707.0M (Est. $740M) 🔴
🔹 AI Cloud Revenue:… pic.twitter.com/HyWTCkcvMA

— Wall St Engine (@wallstengine) August 27, 2026

The net loss for the quarter was $684 million. Most of that was non-cash, with $450.4 million tied to impairments on decommissioned mining hardware and $102.1 million from a decline in the fair value of mining hardware held for sale.

Revenue also fell $7.6 million sequentially from the prior quarter. Management said that drop was a direct result of deliberately taking mining hardware offline ahead of new GPU installations.

AI Cloud Now the Largest Part of the Business

AI Cloud revenue reached $70.5 million in the quarter, or 51.4% of total revenue. That marks the first time AI Cloud has crossed the majority threshold and reflects IREN’s ongoing shift away from crypto mining toward AI infrastructure.

The company ended the quarter with approximately $500 million in annual recurring revenue. After Microsoft accepted Horizon 1, that figure rose to $1 billion.

IREN said it has more than $4 billion of ARR contracted for 2026 capacity already under contract, with the December quarter as the target milestone.

An additional $700 million of ARR tied to an NVIDIA cloud contract is expected to ramp in 2027.

Funding and Capital Plans

IREN secured approximately $19 billion in funding over the past 12 months through customer prepayments, GPU financing, convertible notes, and equity. Cash on the balance sheet at June 30, 2026 stood at $7.6 billion, including $1.7 billion restricted.

Co-CEO Daniel Roberts noted the rapid development of GPU financing as an asset class. “Twelve months ago, GPU financing barely existed as an asset class, and in the last three months, we’ve raised $6.5 billion of it,” he said.

FY2027 capex guidance came in at $25 billion to $30 billion. That covers Microsoft capacity, air-cooled deployments in calendar 2027, and new liquid-cooled capacity at Childress and Sweetwater 1 in the second half of 2027.

Management said data center and GPU capex should rise 15% to 20% for new and ongoing deployments, but expects revenue growth to outpace that increase.

Q1 SG&A is expected to rise by $40 million to $50 million sequentially as the company invests in sales, marketing, R&D, and cloud functions.

Bitcoin mining operations are expected to be fully decommissioned by the end of December 2026.

The stock’s 52-week range sits between $22.63 and $76.87, reflecting ongoing uncertainty around how quickly the AI infrastructure buildout converts into recognised revenue.

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