IREN 10-Q 2026-09-30 section summaries

IREN Limited — Q1 FY2027 (three months ended September 30, 2026)

Quarterly results

IREN’s revenue mix shifted substantially from Bitcoin mining to AI Cloud, while total revenue declined. AI Cloud’s new Services revenue includes Mirantis software subscriptions, platform and professional services; the company does not currently expect Mirantis revenue to be material to FY2027 consolidated results.

Three AI Cloud customers contributed 28%, 24% and 18% of quarterly revenue, or 70% combined. The shift lifted AI Cloud gross profit, but consolidated results were weighed down by higher SG&A ($217 million versus $138 million), R&D ($7 million versus zero) and depreciation and amortization ($148 million versus $85 million). Finance expense increased to $73 million from $9 million. Comparability was also affected by a $665 million unrealized financial-instrument gain in Q1 FY2026 versus a $28 million unrealized loss in Q1 FY2027, and by a $21 million fair-value loss on assets held for sale in the current quarter. Current-quarter tax expense was $2 million, versus a $191 million benefit a year earlier; the effective tax rate was (0.8)% versus 33.1%, reflecting the prior-year gain and current-period valuation-allowance movements and permanent differences.

Cash flow and investment

Operating cash flow included a $645 million increase in deferred revenue, compared with $22 million a year earlier. Financing inflows included $2.360 billion from financing facilities and $498 million from ordinary-share issuance. Cash, cash equivalents and restricted cash declined by $1.838 billion during the quarter.

Balance sheet, debt and contracted obligations

Intangible assets included electricity connection rights ($105 million amortizable and $147 million non-amortizable), software licenses ($61 million), developed technology ($34 million), customer contracts and relationships ($39 million), and in-process R&D ($70 million). Derived tangible equity—equity less goodwill and other intangible assets—was $4.210 billion, versus $3.833 billion.

Total debt principal was $10.041 billion, up from $7.706 billion; $950 million of the carrying amount was current and $8.947 billion non-current. Quarterly debt interest expense was $56 million, including $48 million contractual interest and $8 million issuance-cost amortization, versus $10 million in the prior-year quarter. GPU Financing 2.0 provides up to $2.4 billion at a stated 9.0% fixed rate: $947 million was funded and $1.5 billion remained available at quarter-end. GPU Financing 3.0 was $363 million at an implied 9.51% fixed rate (reported debt-table amount: $355 million). Both facilities are secured by equipment; IREN reported covenant compliance. Convertible notes totaled $6.745 billion principal. Scheduled principal includes $723 million for the rest of FY2027, $1.059 billion in FY2028 and $821 million in FY2029; $6.431 billion is due thereafter, beyond FY2031.

Capital commitments rose to $18.947 billion from $13.810 billion, largely for AI hardware, infrastructure and site development. The company expects significant continued data-center and GPU spending and said available cash, expected operating cash flows and normal-course financing should cover obligations for at least 12 months. GPUs and related infrastructure with a $4.769 billion net carrying amount were pledged as collateral, versus $1.487 billion.

AI Cloud remaining performance obligations under ASC 606 were $6.347 billion, including $1.529 billion expected within 12 months and $1.652 billion in months 13–24; the total includes $50 million related to the financing component on customer prepayments. Fixed and in-substance fixed lease payments totaled $1.841 billion, while remaining aggregate contracted lease value, including capacity not yet available, was approximately $13.957 billion.

Acquisitions, equity and other developments

IREN acquired Mirantis on August 3, 2026, for approximately $538 million, principally 12.6 million shares valued at $502 million, plus cash and replacement awards. The acquisition adds Kubernetes orchestration and cloud-native software to its AI Cloud offering. Preliminary purchase accounting recorded $414 million of goodwill and $145 million of acquired intangible assets; the allocation remains provisional, and the goodwill and intangibles are not tax-deductible.

Ordinary shares outstanding increased from 380,193,608 at June 30 to 406,865,943 at September 30. During the quarter, IREN issued 12,265,474 shares through its ATM program for $541 million net proceeds and 12,632,234 shares for the Mirantis acquisition. Stock-based compensation was $106 million versus $72 million; service-based RSUs outstanding were 34.206 million, with $1.398 billion aggregate intrinsic value. Each co-CEO received 9.099 million service-based RSUs with grant-date fair value of $276 million per award. After quarter-end, IREN issued a further 17,374,990 ATM shares for approximately $630 million gross proceeds.

The U.S. import-tariff dispute was resolved favorably in October 2026, with no additional tariff, fee or interest payable. A Canadian GST dispute involving approximately $28 million remained outstanding; management considered an outflow reasonably possible but not probable and recorded no loss contingency.

IREN — Q2 FY2027 (quarter ended September 30, 2026)

Business transition and quarterly results

IREN is moving from Bitcoin mining toward an integrated AI Cloud business combining data centers, compute and software. It had approximately 93 MW of operating AI Cloud capacity and approximately 7.9 EH/s of Bitcoin mining capacity (about 180 MW) at quarter-end. Management aims to substantially complete the transition of data-center capacity to AI Cloud by December 31, 2026; immaterial mining is expected to continue through 2027, with no further material mining-hardware investment planned. IREN liquidates mined Bitcoin daily and held none at September 30.

AI Cloud Services growth reflected expanded capacity, additional customers and contracts, and Mirantis, acquired August 3. Lease revenue included Microsoft Agreement revenue after Microsoft accepted Horizon 1 in August. Mining revenue fell as Bitcoin mined declined to 402 from 2,039 and average operating hashrate declined to 8.8 EH/s from 45.3 EH/s during site transitions. Lower Bitcoin mined reduced revenue by $116M and a lower average Bitcoin price reduced it by $89M. Mining cost of revenue fell to $18M from $80M, principally because electricity costs declined $61M. AI Cloud Services and Lease cost of revenue was $17M and $11M, respectively, versus $1M and nil.

Higher SG&A included $33M more stock-based compensation and $24M more employee benefits as headcount grew; a $27M decrease in accrued payroll taxes partly offset increases. Higher depreciation reflected Childress capacity, GPUs placed in service and acquired intangibles, partly offset by lower miner depreciation. The net-income swing was driven substantially by Capped Call fair-value changes: a $28M unrealized loss this quarter versus a $665M unrealized gain a year earlier. Current-quarter results also included a $21M decrease in the fair value of Bitcoin miners held for sale. Finance expense rose to $73M from $9M, while interest income rose to $51M from $7M; income tax expense was $2M versus $191M. Adjusted EBITDA margin was 29% versus 38%; this non-GAAP measure excludes, among other items, depreciation and stock-based compensation.

Cash flows and investment

Operating cash generation included a $486M contribution from changes in operating assets and liabilities, chiefly a $645M increase in deferred revenue from AI Cloud contracts, partly offset by a $205M increase in receivables. Investing outflows funded AI hardware and data-center expansion, including Childress, Sweetwater and the conversion of British Columbia sites. Financing inflows included $2.360B of debt proceeds and $498M from ordinary-share issuance.

At September 30, cash and cash equivalents were $3.522B, restricted cash was $2.256B, and cash, cash equivalents and restricted cash totaled $5.778B, down from $7.620B at quarter start. Management expects available cash, operating cash flows and financing proceeds to cover anticipated needs for at least 12 months, while noting substantial planned investment and significant negative investing cash flows.

Funding, commitments and dilution

At September 30, six convertible-note series had $6.746B of principal outstanding, with 0%–3.50% coupons and maturities from December 2029 through December 2033. Conversion may be settled in cash, shares or both; associated capped calls are intended to limit dilution or offset conversion value above principal, subject to caps. The ATM program authorizes up to $6.0B of ordinary-share sales. By September 30, IREN had issued 59.431M shares for approximately $3.0B gross proceeds; by October 30, issuance reached 76.806M shares and approximately $3.7B gross, with 424.357M shares outstanding.

GPU Financing 1.0 commitments total $3.645B for Microsoft Agreement infrastructure: a $1.545B delayed-draw facility at one-month Term SOFR + 2.25% and $2.100B of senior secured notes at 5.96%. At quarter-end, $413M of the facility was funded and $1.575B of notes issued; $1.132B and $525M, respectively, remained available subject to conditions. Of the issued notes, $1.050B was still in escrow and accruing interest; $525M was released October 1, alongside a further $388M facility borrowing.

GPU Financing 2.0 provides up to $2.447B at 9.0%, amortizing over 30 months; $947M was funded and $1.500B remained available at quarter-end, subject to conditions. GPU Financing 3.0 for Prince George totaled approximately $363M, was fully funded by quarter-end, carries an implied fixed rate of 9.51% and is payable over 36 monthly installments. These financings are secured by financed equipment and guaranteed by IREN, creating recourse to IREN; IREN reported compliance at quarter-end. Remaining finance-lease payments, primarily for GPUs, were approximately $341M.

Commitments rose to $18.947B from $13.810B at June 30, primarily for AI Cloud hardware and infrastructure. Separately, IREN subsidiaries committed to purchase approximately $6.7B of GPUs and related products and services from Dell, with deliveries beginning in H2 2027 and payment due within 30 days of shipment; IREN unconditionally guarantees the purchasers’ obligations. Some purchase commitments may be cancellable only with charges or supplier-cost reimbursement.

Execution, customer and industry risks

The three largest AI Cloud customers accounted for approximately 28%, 24% and 18% of quarterly revenue—about 70% combined. A major customer’s default, reduced purchases or departure could materially affect revenue and the ability to service related project debt. Revenue generally begins after compute is delivered, commissioned, placed in service and accepted, so delays can defer revenue while costs continue.

Microsoft requested network-design changes across Horizon deployments. Under the agreement, requested changes extend delivery dates without delay credits; some capacity targeted for December 31, 2026 is now expected in the following quarter, and completion on the revised schedule is not assured. Execution also depends on power, construction, permitting, equipment delivery, installation and customer acceptance; delays can lead to credits, damages, reduced or delayed payments, or termination rights. GPU supply constraints, tariffs, rising costs, falling rental rates, rapid hardware obsolescence, financing access, utilization and customer pricing all affect returns. IREN had grid agreements or equivalents representing approximately 5 GW across the U.S., Canada, Spain and Australia, but this is a development pipeline, not operating capacity.

Mirantis adds cloud infrastructure software, Kubernetes orchestration and enterprise support; IREN is integrating its k0rdent AI platform. In October 2026, U.S. Customs and Border Protection approved protests over the declared origin of mining hardware imported from April 2024 through February 2025, eliminating potential additional tariffs of up to approximately $100M, fees and interest on those imports. The resolution did not affect Q2 results or financial position; authorities could still dispute the origin of other equipment, including GPUs. Bitcoin mining remains exposed to Bitcoin prices, network hashrate and electricity costs; the April 2024 halving reduced the block reward to 3.125 Bitcoin, with the next halving expected in April 2028.

Market risk

IREN states that its exposure to market risk had not changed materially since June 30, 2026. For quantitative and qualitative market-risk disclosures, the company refers readers to Part II, Item 7A of its Annual Report.

Disclosure Controls and Internal Control over Financial Reporting

IREN concluded that its disclosure controls and procedures were effective at the reasonable-assurance level as of September 30, 2026.

Following its acquisitions of Nostrum Group on June 12, 2026, and Mirantis on August 3, 2026, IREN is integrating both businesses into its internal control over financial reporting. The company expects to include them in management’s assessment within the SEC-permitted one-year period following each acquisition. Apart from this acquisition-related integration, IREN reported no changes during the three months ended September 30, 2026, that materially affected, or were reasonably likely to materially affect, internal control over financial reporting.

The company reported no material changes to the risk factors disclosed in its Annual Report. This section identifies no new business risks or other material developments.

For the quarter ended September 30, 2026, no directors or officers reported adopting or terminating a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement. The section reports no financial, operating, or strategic developments.