Business Context and Reporting Period
Company: IREN Ltd (IREN)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended June 30, 2026
Business Overview: IREN is a vertically integrated AI Cloud Services platform owning the data center, compute, and software layers. The company is in a strategic transition from Bitcoin mining to AI Cloud Services, aiming to substantially complete this shift by December 31, 2026. As of June 30, 2026, operating AI Cloud Services capacity was approximately 40MW, while Bitcoin mining capacity remained at approximately 23.2 EH/s (380MW).
Key Financial Metrics
| Metric | Fiscal Year 2026 | Fiscal Year 2025 |
|---|---|---|
| Total Revenue | $707.0 million | $501.0 million |
| Net Income (Loss) | $(702.6) million | $86.9 million |
| Adjusted EBITDA | $245.7 million | $269.7 million |
| Cash and Cash Equivalents | $5,895.6 million | Not provided in text |
| Restricted Cash | $1,723.9 million | Not provided in text |
| Outstanding Indebtedness | $7,976.0 million (Principal) | Not provided in text |
| Trade and Other Payables | $1,825.4 million | Not provided in text |
Note: The filing text does not provide specific values for gross margins, operating margins, or free cash flow for the reporting period.
Material Changes vs. Prior Period
- Profitability Reversal: The company swung from a net income of $86.9 million in FY2025 to a net loss of $702.6 million in FY2026. This is attributed to substantial investments in AI Cloud Services expansion and the transition away from Bitcoin mining.
- Revenue Growth: Total revenue increased by approximately 41% year-over-year, driven by the ramp-up of AI Cloud Services.
- Adjusted EBITDA Decline: Adjusted EBITDA decreased by approximately 9% to $245.7 million, reflecting the capital-intensive nature of the transition and increased operating costs.
- Strategic Acquisitions: Completed the acquisition of Nostrum Group (Spain) in June 2026 and Mirantis, Inc. (cloud software) in August 2026, expanding geographic footprint and software capabilities.
- Major Contracts: Secured significant long-term contracts, including a $9.7 billion agreement with Microsoft (Horizon facilities) and a $3.4 billion agreement with NVIDIA.
Guidance, Outlook, and Risks
Management Commentary and Outlook
- Transition Timeline: Management aims to substantially complete the transition from Bitcoin mining to AI Cloud Services by December 31, 2026.
- Capacity Pipeline: As of June 30, 2026, the company has executed agreements representing approximately 5GW of total power capacity across the US, Canada, Spain, and Australia.
- Capital Needs: The business remains capital-intensive. The company expects to incur substantial capital expenditures to acquire hardware (GPUs), construct data centers, and fund operations.
Key Risks and Contingencies
- Customer Concentration: A substantial majority of contracted revenue is derived from a small number of customers (e.g., Microsoft, NVIDIA). Loss of these customers would materially impact results.
- Supply Chain and Hardware: Heavy reliance on a limited number of GPU suppliers (NVIDIA, AMD). Delays, price increases, or obsolescence of hardware pose significant risks to delivery schedules and margins.
- Regulatory and Grid Constraints: Significant regulatory scrutiny in Texas (ERCOT Batch Zero process), Oklahoma, and Europe regarding grid interconnection, power consumption, and data center siting. Delays in grid connections could delay revenue recognition.
- Debt and Liquidity: High indebtedness ($7.98 billion principal) limits cash flow flexibility. The company relies on customer prepayments and asset-backed financing to fund growth.
- Legal Proceedings: A putative securities class action was dismissed with prejudice in February 2026 but is currently on appeal. A settlement of $20 million regarding prior Canadian bankruptcy proceedings was paid in Q3 2025.
Investor Verification Checklist
- Contract Execution: Verify the status of the Microsoft "Horizon" facility deliveries (Horizon 2-4 targeted for Q4 2026) and potential delay credits.
- GPU Supply Chain: Confirm the ability to secure and deploy the required volume of NVIDIA H100, H200, B200, and B300 GPUs to meet contractual obligations.
- Grid Interconnection: Monitor the outcome of the ERCOT "Batch Zero" interconnection study and its impact on the energization of Texas-based projects (Sweetwater, Childress).
- Debt Covenants: Review the terms of the $3.6 billion GPU financing and other debt instruments for compliance with debt service coverage ratios and mandatory prepayment triggers.
- Integration Risks: Assess the integration progress of Mirantis (software) and Nostrum Group (Spain) and the realization of anticipated synergies.
- Bitcoin Transition: Track the decommissioning of Bitcoin mining hardware and the reallocation of power to AI Cloud Services to ensure the December 2026 target is met.