IREN

IREN Ltd. Q1 2026 (Ended Sept 30, 2025) Filing Summary

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended September 30, 2025. IREN Ltd. operates two reportable segments: Bitcoin Mining and AI Cloud Services. The company transitioned from IFRS to U.S. GAAP effective June 30, 2025, with comparative periods restated. As of the reporting date, IREN operates data centers in the U.S. (Texas) and Canada (British Columbia), with a strategic pivot toward High-Performance Computing (HPC) and AI infrastructure.

Key Financial Metrics

Note: Net income includes a significant non-cash unrealized gain of $665.0 million on financial instruments (Capped Call and Prepaid Forward Transactions).

Material Changes vs. Prior Period

• Revenue Surge: Total revenue increased 355% to $240.3 million, driven by a 369% increase in Bitcoin mining revenue ($232.9M) due to higher Bitcoin prices and increased hashrate (45.3 EH/s vs 12.1 EH/s), and a 130% increase in AI Cloud Services revenue ($7.3M).
• Profitability Shift: The company swung from a net loss of $51.7 million to a net income of $384.6 million. This is primarily attributable to the $665 million unrealized gain on financial instruments and increased operating revenue, partially offset by a $190.7 million income tax expense.
• Expense Growth: Selling, General, and Administrative (SG&A) expenses rose to $138.4 million from $25.2 million, largely due to a $64.2 million increase in stock-based compensation and $31.6 million in accrued payroll taxes on stock exercises.
• Asset Impairment: Impairment charges increased to $16.3 million, primarily related to S21 Pro and non-functioning T21 miners being displaced for AI deployment.

Guidance, Outlook, and Risks

Strategic Outlook: Management is aggressively expanding AI Cloud Services, targeting the replacement of ASIC mining hardware with GPUs. The company signed a $9.7 billion agreement with Microsoft Corporation (subsequent to period end) for dedicated GPU services over five years. Additionally, a $5.8 billion GPU purchase agreement with Dell was executed.

Capital Resources: On October 14, 2025, IREN issued $1.0 billion in 0.00% Convertible Senior Notes due 2031. The company maintains a strong liquidity position with over $1 billion in cash, funded by operations and an At-The-Market (ATM) equity offering that raised approximately $1.0 billion during the quarter.

Risks and Contingencies:

• Tariff Disputes: U.S. Customs has challenged the country of origin for imported mining hardware, assessing a potential 25% tariff on approximately $100 million of goods. IREN is contesting this; no accrual was recorded as the outcome is uncertain.
• Legal Settlements: A $20 million settlement was paid to NYDIG regarding prior equipment financing disputes, resolving related bankruptcy proceedings.
• Operational Risks: Exposure to Bitcoin price volatility, global hashrate fluctuations, and the ability to secure low-cost renewable energy. The company also faces risks related to the implementation of a new ERP system.

Investor Verification Checklist

• Non-GAAP Adjustments: Verify the sustainability of net income by excluding the $665 million unrealized gain on financial instruments; Adjusted EBITDA ($91.7M) is a more stable metric of operational performance.
• Capital Expenditure Commitments: Review the $1.08 billion in commitments payable within 12 months and the subsequent $5.8 billion GPU purchase agreement to assess future cash burn and financing needs.
• Tariff Exposure: Monitor the status of the U.S. Customs dispute regarding the 25% tariff on mining hardware, which could materially impact margins if upheld.
• AI Transition Execution: Track the deployment of GPUs at the Childress "Horizon" sites and the Prince George site to validate the revenue shift from Bitcoin mining to AI Cloud Services.
• Convertible Note Dilution: Assess the potential dilution from the 2029, 2030, and 2031 Convertible Notes, noting the associated Capped Call Transactions intended to mitigate this.