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IREN Writes Off $450 Million Worth of Bitcoin Miners

$IREN (-0,11 %) has released its financial results for fiscal year 2026. Revenue was slightly above analysts’ estimates, but the loss is massive—and almost entirely non-cash.

The figures (Q4, quarter ending June 30):

Revenue: $137.2 million – about 4% above the estimate of ~$132 million, following $144.8 million in the previous quarter
AI Cloud: $70.5 million, following $33.6 million (+110%) – exceeding the mining business for the first time
Bitcoin mining: $66.7 million after $111.2 million (−40%)
Net loss: $684.0 million – of which $450.4 million was write-downs on decommissioned mining hardware
Adjusted EBITDA: $19.2 million, down from $59.5 million

The loss appears dramatic, but is essentially a accounting consequence of the restructuring: The mining computers are being written off while the facilities are being converted to GPUs. Operationally, cash flowed into the company during the quarter—$1.81 billion from ongoing operations, driven by $1.72 billion in customer prepayments.

According to its own figures, IREN has a total of $14 billion in cash on hand, committed GPU financing, and customer prepayments—with a market capitalization of around $16 billion, this means that nearly the entire company’s value is already fully funded.

In addition, IREN currently has capacity with an ARR of $1 billion already in operation.

More revealing than the net loss is the interest rate differential in the financing:

The $3.6 billion for the contract with Microsoft $MSFT (+0,05 %) costs 6.0%, while the new $2.4 billion funding round from Blue Owl $OWL and PIMCO for clients without an investment-grade rating 9.0%. In my view, a three-percentage-point premium is the true cost of client diversification.

Source: https://iren.com/investor/events-and-presentations

7 Commentaires

Dividendenopi👴@Dividendenopi

Best regards from @Raketentoni —I’m supposed to pass along the following to you: Could someone please post something on Getquin under Pazzzi’s post?
First: IREN does not have 14 billion USD in “cash on hand.” That would be misleading. A more accurate term is secured or committed financing capacity, including cash, GPU financing, and customer prepayments. The Microsoft contract alone includes 3.65 billion USD in GPU financing at 6.0%; together with approximately $1.94 billion in Microsoft prepayments, this finances about 96% of GPU capex. IREN
Second: The core of the story is actually very positive: IREN is undergoing an operational transformation from a Bitcoin miner to an AI cloud/data center company. Q3 already showed $3.1 billion in ARR under contract and a target of $3.7 billion in ARR by the end of 2026; Microsoft and NVIDIA are the key anchors in this. SEC

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Pazzzi@Pazzzi

@Dividendenopi Admittedly, that was phrased a little too optimistically 🙋‍♂️ — it has been revised

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Chris@Chris-1989

I'm starting to find this sector interesting again as a potential entry point, but somehow the bad news just keeps coming—I'd rather sit tight and keep Iren on my watchlist for now!

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Olli@Olli68

Unfortunately, there’s been an announcement of an additional $25–30 billion in Capex for 2027. I hope that doesn’t give you any headaches. After all, glossing over these astronomical sums obscures the real core risk: the extreme dilution of shareholders’ stakes through continuous capital increases. The whole thing is a high-risk gamble, since this massive capital requirement must be financed through expensive loans with interest rates currently as high as 9.0%.

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Pazzzi@Pazzzi

@Olli68 The $25–30 billion figure sounds very high and underscores the financing risk. It was clear from the outset that these sums would have to be raised. 9% is already a lot, but we mustn’t forget that the payback period is less than two years.

I need to run the numbers on the funding plan today to see how much actually needs to be raised through stock issuance. Here’s what I’ve seen so far:
The company has already secured cash, financing commitments, and GPU financing totaling ~$14 billion; it plans to raise ~$8 billion in GPU financing at ~6%, and has an expected ARR of ~$4 billion. With a $3 billion net margin on that, that already comes to ~$25 billion, which I think is reasonable.

Once the buildings are completed, the company plans to restructure the 9% debt into asset-backed financing, which would bring the rate back down to 6%.

If roughly ~$5 billion in stock issuances materialize, that represents ~30% of the company’s current valuation, but it would result in an additional $10 billion in ARR starting next year.

High Risk – High Reward
Thanks for your critical perspective

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Michey777@Michey777

@Pazzzi I tried it with ChatGPT a little while ago, too.

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_Felix10_@_Felix10_

Aua

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